Cryptos losing momentum among American investors: what the FINRA study reveals

According to a study by the FINRA Investor Education Foundation, American investors’ enthusiasm for cryptos has cooled. Indeed, only 26% of investors still plan to buy cryptos, compared to 33% in 2021. However, 27% still hold them, an unchanged level. There is less desire to buy more, but not necessarily a massive exit.

The decline in enthusiasm: a trend beyond crypto

A FINRA study reveals that only 26% of American investors still plan to buy digital assets, compared to 33% three years ago. Yet, 27% still own them.
This paradox says a lot. They are not selling, but they are no longer accelerating. The pandemic years’ fever has cooled, taking with it the enthusiastic entries that had surged in 2021.

The slowdown is visible everywhere, but it especially hits newcomers. Only 8% of investors started investing recently, compared to 21% in the previous period. Young adults, once the drivers of the crypto wave, are the most affected: their participation rate falls from 32% to 26%. Some clearly jumped ship after the market’s roller coaster.

And it’s not just crypto that is retreating. All investments considered risky are losing popularity. The study reminds that 66% of people familiar with digital assets now consider them very risky. A sign of maturity or lasting concern.

More cautious investors but still attracted to risk

What intrigues is the contradiction at the heart of young Americans’ behaviors. Their risk tolerance is decreasing. Indeed, only 15% of those under 35 say they are ready to accept strong fluctuations in their portfolio, compared to 24% previously.

Yet, 62% acknowledge they will have to take risks to reach their goals. Two speeches, two realities. Because on the ground, the shown caution sometimes looks like a publicity stunt.
Young people remain the most active in aggressive strategies. Indeed, 43% trade options, 22% use margin, and nearly one third buy meme stocks.

Despite this apparent decline, crypto continues to gain ground in American society. More than 50 million adults would own digital assets today.

Crypto does not disappear from their universe. It is rather part of a set of speculative bets where the desire to outperform the market remains strong, despite a more cautious facade.

Social media, influencers, and false promises: a still fragile ground

FINRA points out another impossible-to-ignore phenomenon. It is the growing influence of social media in shaping financial decisions. Among those under 35, 61% now rely on influencers to guide their investments. YouTube dominates, TikTok advances, and friends’ advice now surpasses that of professionals.

This very spontaneous mode of information fosters a climate where crypto circulates as much as a trend as a considered investment. As a result, the risk of getting caught remains high.

Nearly half of investors say they are ready to believe an offer promising a 25% guaranteed return. This is indeed a typical crypto scam scenario. Yet, 89% think they have never been targeted by fraud. Trust remains high, sometimes too much.

This vulnerability leads FINRA to emphasize a key point. Indeed, financial education becomes indispensable if we want to avoid that the next waves of crypto adoption come at the expense of the youngest and least equipped investors.