The Crypto Frenzy Is Creating A New Generation Of Investors In Asia

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Crypto coins, by QuoteInspector.com, Flickr
Image: Crypto coins, by QuoteInspector.com, Flickr

The cryptocurrency frenzy of these past years has created a new generation of investors in Asia, according to new data released by investing platform eToro.

73% of new investors that joined eToro globally in 2017 and 2018 purchased crypto. Of these investors, 11% have since gone on to invest in other assets including stocks, commodities and forex, a trend particularly prominent among the younger generation with 44% of all of these diversifying aged between 25 and 34.

“For many, investing has been seen as the preserve of the wealthy and/or something that is too complicated for the average person to take part in. Crypto has changed this,” said Paul Familiaran, the head of eToro’s Southeast Asia region. “Across Asia, there are now people investing that would otherwise not be, which marks a positive shift in investor behavior.”

Data also show that China and Asia Pacific led the way in terms of new female investors joining the platform, with women making up 16% of traders on eToro in China and 14% across the rest of Asia, compared to the global average of 8%.

“Regardless of whether you believe in the long-term opportunities provided by crypto, it has been an essential entry point for investors in Asia and all around the world,” said Familiaran.

“Crypto has captured the interest of a new demographic of traders in Asia that would otherwise not be investing in our view. In China and more widely across Asia, this has also translated into a significant proportion of female investors signing up to eToro and trying out trading for the first time.”

Those buying cryptoassets were found to hold 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.

Despite the so-called crypto-winter, cryptocurrency trading continues to rise around the world. US-based mobile payment platform Square reported US$166 million in revenue from selling bitcoins in 2018, according to the company’s quarterly earnings report published on February 27.

Square’s overall net revenue was capped at US$3.3 billion last year, 5% of which was generated from its crypto buying service on the Cash App.

Square, an American payments company, extended its support towards cryptocurrency trading in January 2018. The platform had more than 15 million active customers in December 2018, doubling from a year earlier.

In the UK, London-based data analytics portal Skew noted strong bitcoin trading activity in the last 120 days with trading volume on BitMEX for XBT/USD averaging US$65 million per hour.  

Over the past two weeks, cryptocurrencies have rallied with the total market capitalization for the entire industry climbing over 20% to hit a high of US$134 billion on Tuesday, marking the best performance in almost six weeks. Daily trading volumes have reached their highest levels for almost nine months, or US$34 billion on Tuesday, higher than it had been since early May 2018.