Retail Investors Show Growing Interest in Crypto, but Market Volatility and Fraud Concerns Limit Engagement: IOSCO Report
Retail investors are increasingly drawn to the cryptocurrency market, despite the speculative and highly volatile nature of these digital assets. This insight was underscored in a recent report released by the International Organisation of Securities Commissions (IOSCO). The report, titled “Investor Education on Crypto-Assets,” was compiled through a survey spanning 24 jurisdictions. Based in Madrid, Spain, IOSCO highlighted the importance of guiding this growing interest by promoting crypto awareness and education, particularly as large, capital-rich investors become more involved in the market.
The report revealed that even during the challenging times of 2022, when the total market valuation of cryptocurrencies dipped below $1 trillion, retail investors continued to engage in crypto trading. This sustained interest was observed not only in advanced economies but also in emerging markets, showcasing the widespread appeal of digital assets across various regions. Despite the downturn, crypto remained an attractive option for many retail investors, reflecting a long-term belief in the market’s potential for growth.
The IOSCO report also highlighted that since 2020, the crypto market has seen significant evolution. Although the 2022 “crypto winter” led to substantial market declines, the involvement of retail investors has persisted. Notably, the demographic of these investors has shifted. According to IOSCO, younger, more diverse investors are driving the retail participation in the crypto space, challenging traditional perceptions of who engages in financial markets.
Despite this sustained interest, IOSCO raised concerns about the risks associated with crypto investments. Market volatility, fraud, and a lack of regulatory clarity continue to deter many retail investors from fully embracing the space. The report emphasized the need for comprehensive investor education, especially in light of the complex risks associated with crypto assets. As the sector matures, addressing these challenges through robust investor protection and education initiatives will be key to fostering a safer environment for retail participation
