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Cryptoassets Provide a Gateway to Investing for a New Generation

New data released by global multi-asset investing platform, eToro shows that the crypto boom has helped to create a new generation of investors.

The majority (73 percent) of new investors joining eToro in 2017 and 2018 purchased crypto. Of these investors, more than one in ten (11 percent) have since gone on to invest in other assets including stocks, commodities and forex alongside their crypto investment.

The move to invest in other financial instruments alongside crypto is particularly prominent in the younger generation, with nearly half (44 percent) of all those diversifying aged between 25 and 34.

Iqbal V. Gandham, UK Managing Director at eToro,  from eToro said: “Everyday we read another story about how ordinary people, especially millennials, are not investing enough. Yet crypto shows us that if you can capture their interest then people will invest. Regardless of whether you believe in the long-term opportunity offered by crypto, it is worth us looking at what we can learn from these crypto investors, especially as we’ve seen that once they have dipped their toes into investing, some were then prepared to diversify.”

The move into traditional assets was seen all around the world, with 10% of UK cryptoasset investors diversifying into other investments alongside their crypto holdings. The trend was most pronounced in Italy and China, with 14 percent and 12 percent of crypto investors respectively going on to become investors in other asset classes.

Globally, the most popular asset class for crypto investors to try next was stocks, with one-in-three of these investors doing so. The UK followed this trend with more than a third (34 percent) of those crypto investors who diversified choosing stocks as their second investment on the eToro platform. 31 percent chose to copy the activities of other eToro users as their second action and 23 percent invested in commodities.

The move to invest in other financial instruments alongside crypto is particularly prominent in the younger generation, with nearly half (44 percent) of all those diversifying aged between 25 and 34.

Of those that chose stocks for their second investment on the eToro platform, 42 percent were aged 25-34, possibly indicating a newfound popularity for stocks amongst younger UK investors.

Iqbal V. Gandham continued: “As an industry we need to rise to the challenge and work harder to engage consumers. For too long investing has been seen as the preserve of the wealthy and/or something that is too complicated for the average man on the street. Crypto changed that.

“We now have an opportunity to show those people whose first experience of investing was crypto, the other opportunities that exist. By making sure people can access all the assets they want to own in one place, we can encourage a new generation of investors to take more control of growing their wealth with a diversified portfolio of investments, including crypto.”

The data also showed that those buying cryptoassets held their positions for longer than other asset classes. Globally, crypto positions lasted 71 days longer than the next longest-held asset, ETFs, which could indicate a belief in the long-term investment opportunity offered by cryptoassets.

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