Retail investors are asking questions about cryptocurrencies with an interest that borders obsession. Yet, they represent highly speculative and volatile virtual assets.
The Board of the International Organisation of Securities Commissions, or IOSCO, reported and published that discovery.
A body headquartered in Madrid, Spain, said it surveyed 24 jurisdictions to compile this report, “Investor Education on Crypto-Assets.”
Released this week, the report emphasizes that the growing interest of large capital-equipped investors in crypto should be channeled through a focus on crypto awareness and education.
According to the IOSCO report, the crypto sector was even in the range of less than $1 trillion (approximately Rs. 1,67,09,363 crore) in 2022. Yet, retail investors were investing in crypto assets.
Such a trend was not restricted to retail investors in advanced economies but also to those in emerging markets.
Since 2020, the space has remained in a state of evolution. Despite market volatility, which experienced a major downturn during the 2022 ‘crypto winter, ‘retail investors continue to invest in the crypto-asset market. According to the report, these investors tend to be younger and more demographically diverse.
It is now found that most of the anticipated investors in the retail sector are gathering their investment-related information from unauthorized, random, and unverified sources.
As per the IOSCO, in turn, this would throw such investors into financial disarray.
“These investors generally gather investment information off social media and overestimate their investment experience and knowledge,” the report said.
To this end, the financial institution asserts that governments must intensify their efforts to draft across-the-board crypto regulations specific to their economies.
The report further calls for investor education on the protections offered by regulatory frameworks and the risks associated with investing in non-compliant crypto assets.
