MORE work needs to be done by both regulators and the industry to better prepare retail investors for the cryptocurrency market, said Luno Malaysia.
This is according to an online nationwide survey aimed at understanding the financial management habits of everyday individuals.
Conducted by YouGov, the data was collected from more than a thousand Malaysian adults throughout the country to ensure a statistically accurate representation of the typical saving and investment strategies employed by the general public.
“While it is a welcome sight to see that most retail investors do understand the risks associated with cryptocurrency trading and try to mitigate them as best as they can, we still feel the number of investors who actually undergo such prudent measures is low,” said Luno Malaysia country manager Aaron Tang.
“With an increasing number of retail investors starting to gain interest in digital assets, we believe it is now more important than ever to increase efforts in promoting financial literacy initiatives to better educate the general public on the potential uses of cryptocurrencies, as well as the strategies that can be employed to minimise risk exposure.”
According to the survey, Malaysian investors are more confident in the idea of using cryptocurrencies as a viable method in attaining long-term wealth creation and preservation.
A total of 62% of current investors stated that they would consider investing in alternative assets such as cryptocurrencies as a way to diversify their portfolios, while 40% of the respondents stated that using cryptocurrencies as an alternative store of value was an attractive feature as well.
Malaysians are generally thoughtful and aware of risk management when investing into cryptocurrencies.
For example, the survey highlighted that 42% of cryptocurrency investors stated that they only purchase cryptocurrencies from reputable and trusted exchanges.
In turn, roughly 43% of these respondents would ensure that they conduct proper and thorough research prior to committing to a transaction.
To limit their financial exposure to cryptocurrencies, 57% of respondents stated that they would only invest what they can afford to lose.
Cryptocurrency could see increased participation should the government or the industry increase efforts in promoting financial education initiatives to better educate the general public about alternative assets.
According to the survey, 34% of those who do not currently invest said that they would likely start investing with cryptocurrencies if there is better financial education on how to properly trade the digital asset.
On a similar note, 46% of the same group hope that local regulated cryptocurrency exchanges would feature more easy-to-understand financial educational resources as well.
Meanwhile, the survey also found that Malaysians predominantly view wealth as an important catalyst in attaining greater financial freedom for both themselves and their families.
A majority of respondents (60%) stated that the importance of having money to them is for safeguarding their family’s wellbeing, while 58% of respondents stared the importance of attaining a financially flexible lifestyle in the future.
Additionally, 64% of the total sampled population stated that they save their money often, with data illustrating that respondents aged 18-34 years old were most likely to be in the regular savers group (66%).
In comparison, only 55% of 55+ year olds are regular savers, thus indicating that the younger generation of Malaysians tend to be more proactive in their savings compared to older generations.
When it comes to making investment decisions, the survey found that respondents were more likely to be influenced by family members and peers (31%) compared to professional financial advisors or financial service companies (19%).
According to the data, most (34%) of the respondents tended to seek financial advice about long-term savings and investment strategies, while financial advice on budgeting, financial planning, and debt management was less popularly sought out (24%). – Sept 29, 2021
