69% of Retail Investors Unfazed by 2022 Crypto Winter: Survey

According to the report, younger investors are less frightened of the cryptocurrency industry following the meltdown last year.

Despite what is perhaps the greatest bear market in crypto history, most retail investors are still very interested in investing in digital assets.

According to a recent poll published by the social trading platform eToro, more than two-thirds, or 69%, of retail investors are either pleased or have mixed feelings about the impact of last year’s lengthy market decline. The remaining one-third, or around 31%, are hesitant of investing in the industry following the catastrophe.

“The fact that two-thirds of retail investors feel indifferent, or even more positive, after the worst year for markets in a generation may seem weird,” eToro‘s Global Markets Strategist, Ben Laidler, said. However, the majority of this generation thinks in terms of years and decades. For investors with longer time horizons, the end of 2022 has provided an opportunity to purchase companies at reduced valuations, enhancing the forecast for long-term profits.”

According to the research, which polled 10,000 retail investors from 13 countries and three continents, the largest driver of restored investor confidence in crypto investing is investors’ diminishing anxiety of the perceived threat of inflation.

According to the poll, towards the end of the third quarter of 2022, almost 24% of retail investors saw the perceived threat of inflation as the greatest risk to their investment portfolios.

However, by the end of 2022, the concern about inflation had reduced to 19%, while almost 22% of respondents listed the global recession as the major threat to their investment portfolios in 2023.

As a result, many investors are rebalancing their portfolios, increasing their cash allocation to 50% and adding more defensive assets such as healthcare and utilities.

The survey also discovered that younger investors are less afraid of the crypto market, whereas senior investors facing retirement are more hesitant.

Around 76% of young retail investors between the ages of 18 and 34 are favourable or indifferent about the decline, while only 60% of senior investors over the age of 55 are positive or neutral about the crypto market.

“2022 will be the first significant bear market for many less experienced retail investors, but evidence shows that older investors with shorter retirement time horizons are facing the most strain,” the research noted.