Survey: 32% of novice traders only invested in crypto in past year

Nearly one in three novice traders reported making no traditional investments outside crypto over the past year, according to a survey published today by Overbit, a Singapore-based cryptocurrency exchange. In contrast, 85.3% of professional traders reported diversifying their investment portfolios to stock, real estate or other traditional assets.

Fast facts:

• The survey of 3,000 traders across 87 countries conducted from March 17 to 31 found that while the majority of respondents regarded the crypto market as riskier than the stock market, 82.2% also believed that it is more profitable. The survey was conducted through social media networks as well as Overbit’s partners and traders.

• The study also examined the impact of Covid-19 on trading behavior, with 55.7% of respondents saying that the pandemic had increased their investment risk appetite.

• “During the Covid-19 pandemic, we saw new users entering the crypto space and venturing into trading. These users are still here today trading the markets during this correction period,” Overbit’s CEO Chieh Liu told Forkast.News in an email. “The crypto markets were rather heated in April 2021 and so we are now in a pullback. However, the US institutional adoption of Bitcoin by the likes of MicroStrategy, Tesla, Galaxy Digital are in the back of the minds of crypto traders. We expect to see another record high for the crypto markets in 2021 with Bitcoin reaching $100K.”

• Bitcoin and Ethereum were found to be the cryptocurrencies of choice. 83% of respondents held Bitcoin at some point over the past year and ownership of alternative tokens such as Uniswap and Chainlink was also on the rise, the survey reported. Earlier this week, the price of Bitcoin dipped below US$30,000, the first time in six months, but has since rebounded and is currently trading around US$32,000, according to CoinGecko.

• As for non-fungible tokens (NFTs), which was all the rage earlier this year, 61.9% of respondents were aware of NFTs but only 25.9% owned one or more of them, the survey found.

• In terms of safekeeping their crypto, 65.3% of respondents — mainly novices and casual traders — stored their crypto on an exchange, while professional traders preferred using cold wallets. About 41% of users said they lost crypto arising from a personal error, 24% reported losing money to one or more scammers, while 12.6% lost assets to a hacker or other security breach.