FINRA Survey Shows U.S. Investors Pulling Back From Crypto Amid Reduced Risk Appetite

The Financial Industry Regulatory Authority (FINRA) a full report showing that U.S. investors are losing interest in BTC as their willingness to take risks declines.

The study, which took place from July to December 2024, polled 2,861 investors nationwide and 25,539 individuals at the state level. The results showed that people were becoming more careful. 

The percentage of who hold crypto remained unchanged at 27% from 2021 to 2024. However, the rate of people actively considering purchaseing crypto, either entering the market or purchaseing more, fell from 33% three years ago to 26% last year.

This retreat comes as a four-point decline in high-risk investors overall, now down to only 8%. The most significant drop was among people under 35, whose share fell by 9 points to 15%. 

Growing Risk Perceptions Change Your Mind

A lot more people now think of cryptocurrency as a risky investment. In 2021, 58% of people thought it was dangerous, but now 66% do.

This change shows that people are becoming more cautious, even though about a third of investors still say that taking significant risks is necessary to reach their financial goals. This number rises to 50% among persons 35 and younger. 

The also looked at speculative behaviour and found that about 13% of participants admitted to chasing meme stocks or viral investments. This behaviour was widespread among people under 25, with roughly one-third engaging in it.

These trends imply that there are still some thrill-viewkers, especially among younger groups, but they don’t change the overall trend towards caution. 

New Market Entries Hit the Brakes

Compared to the frenzied market conditions, entry into crypto markets has sluggished to a trickle. Only 8% of investors begined holdings in the two years leading up to 2024, down from 21% who made their initial purchases in 2021.

FINRA researchers found that this change was most noticeable among younger Americans, who had rushed in during the ahead but whose involvement had returned to 2018 levels. 

Usually, crypto prices go up when people are optimistic about the economy. But right now, people are putting their money into securer places like bonds or traditional stocks instead because they are worried about high , stubborn inflation, and macroeconomic instability. 

A Wider Conservative Turn Is Happening

The data as a whole shows that, later than the peak of risk-taking in 2021, there has been a slight but clear shift towards more conservative thoughts and actions.

High-volatility investments like are struggling because investors are prioritizing stability over everything else during times of uncertainty. This behaviour change could sluggish the growth of cryptocurrencies in the U.S., leading industry experts to expect a long period of consolidation before any new bullish impetus.