Investor Confidence higher for crypto amongst the young
Insights from Chartered Accountants ANZ sheds light on crypto confidence
The Chartered Accountants ANZ Investor Confidence Survey is out and I got asked to provide some comments for the AFR. You can check that out here: https://www.afr.com/wealth/investing/young-investors-still-believe-in-crypto-after-crash-20220707-p5azqz
Below are some of my further thoughts on it:
Interesting set of results from CA’s survey. Overall I’m not surprised that investor confidence is down. When we look at the ANZ Roy Morgan Consumer Confidence (and Business Confidence) data, it’s a similar story with the index being near the lows we saw as the Covid-19 pandemic lockdowns began.
ANZ Roy Morgan Consumer Confidence as at June 202
More interesting to me, however, is that we see interest continuing to grow amongst the younger investors far more than in older generations. This could be indicative of the generational wealth divide that’s been apparent when you look at housing affordability and other assets but interestingly, this gets solved as generational wealth transfer plays itself out.
Anyone, no matter the age is going to be fearful of the volatility in this space but I would argue that volatility is a feature. This market has the same traits as early-stage internet with a lot of hype and bluster but diamonds in the rough are out there. There is regulation on the way and even before then we are seeing teams building with safety in mind because they’re unlikely to get new investors in without showcasing features that help protect investors. We’ll see more on-chain insurance and distributed regulation and ratings than we have in the past and that’s a good thing. Another key difference between this and traditional markets is that this market trades 24.7 and is far more transparent in data accessibility. Imagine the GFC but you could see on chain that Lehman Brothers was unloading bad debt to other banks. You could do something about it. That's a feature we have here but we still don't have enough education or services spreading this word to the masses.
The report also highlighted the belief and support for better digital reporting here and this is something that blockchain tech can help provide. Digital reporting has unlocked so much value in the US with the XBRL format being used by the US Federal reserve for company reporting. This led to lower barriers to build cost effective financial reporting solutions and make them available to the public. Doing that here with digital first tech like what blockchain offers can unlock similar sorts of value across not just financial reporting but far more.
It’s overall heartening to see the confidence that younger investors have in this space but we need to, as a group, make sure that we build things that are sustainable and provide utility and educate people as much as possible about what is good and what is bad.
Here’s a link to the full CA report: https://www.charteredaccountantsanz.com/news-and-analysis/media-centre/press-releases/new-survey-investor-confidence-plummets-amid-market-uncertainty
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