The realm of crypto-copy trading is experiencing a significant uptake by young investors, particularly those belonging to Gen Z, a demographic that is changing the face of cryptocurrency trading. A recent report by leading crypto-exchange Bitget divulges that nearly half of all its copy traders are below 25 years of age. This figure juxtaposes interestingly with traders in the age group of 25 to 35 years, making up slightly less than a third, stressing the infatuation of younger investors with this new-age fiscal system.
Crypto-copy or social trading allows investors to mirror the portfolio actions of a selected individual. This feature has been present in equity markets for some time, with leading exchanges including eToro, Bybit, and MEXC offering such services.
Speculating upon why Gen Z has been gravitating towards this form of investing, Bitget suggests that the propensity of these young minds to seek advice from social-media influencers could explain this shift. An interesting previous study from Forbes Advisor reported that eight out of every ten Gen Z investors seek financial advice on social media, and half of them have claimed to have made substantial profits from this advice. Platforms as diverse as YouTube, Reddit, and TikTok have been noted as the prime channels of this advice.
Further crystalizing Gen Z’s magnetism towards the crypto-world is a recent report from the Financial Industry Regulatory Authority (FINRA), revealing that Cryptocurrency was the most popular investment domain for Gen Z. Astonishingly, around 44% of US-based Gen Z investors and 35% of the millennial group started with a cryptocurrency investment.
As per Bitget’s survey, the most sizeable section of its copy-trading users hail from Western Europe, closely tailed by East and Southeast Asia. Interestingly, while Latin American users made the fourth-largest group, it was Africa that showed the highest proportion of interest at 62%, despite only being 1% of Bitget’s total copy trading users.
This revelation places an interesting progression before our eyes. Gen Z’s approach towards cryptocurrency is not only reshaping the present of crypto markets but also holds promising potentials for its future. However, their reliance on social media advice beams a light on the frailty that may come hand-in-hand with this digital gold-rush. With lack of regulatory oversight and potential for misinformation, our youngest investors are taking a risky ride on this roller-coaster. Hence, they must tread cautiously to avoid dire financial consequences.
Source: Cointelegraph
