Bitaigen Research Starting from data and trends, we dissect why retail investors rapidly embraced crypto assets after the pandemic, reveal the behavioral drivers, platform ecosystems, and the risk perception of the new generation of investors, help readers grasp the essence and future trajectory of this wave, and discuss how the evolving regulatory environment may affect its sustainability.
Since the COVID‑19 pandemic spread worldwide in 2020 and brought economic activity to an almost complete standstill, retail trading enthusiasm has shown a marked rebound. Data from U.S. investment platforms indicate that roughly 15% of retail investors entered the market for the first time in 2020, with an estimated 10 million new investment accounts opened over the year, and Robinhood alone accounting for over 60% of those new users. Behind this influx of novices lie both the arbitrage opportunities created by extreme market volatility and the direct impact of massive fiscal stimulus programs that injected liquidity into households across many countries.
Key Data
- In 2020, Millennials and Gen Z made up the core of new‑market entrants, with more than half of young people saying that the economic uncertainty during the pandemic prompted them to start paying attention to asset allocation.
- Benefiting from lower transaction costs and the easy availability of new products, individual participation surged dramatically over the past year.
COVID‑19: Challenges and Opportunities
In mobile‑first financial services, trading apps such as Robinhood and Coinbase have vaulted to the top of the Apple App Store rankings, even surpassing mainstream social platforms like TikTok and Instagram. This phenomenon suggests that, especially among younger demographics, investment tools are gradually displacing traditional social apps as a primary channel for information and entertainment.
Research released by Charles Schwab further points out that the surge of U.S. retail investors in 2020 is closely linked to two factors: first, the global economic slowdown forced governments to roll out massive cash stimulus; second, the high‑return expectations generated by market turbulence attracted a large pool of previously inactive capital into securities markets. The firm’s senior executive vice president, Jonathan Craig, told *Cointelegraph*:
“Over the past year, the combination of lower trading fees, greater accessibility of financial products, and opportunities created by market volatility has driven a rapid expansion of the individual investor base.”
At the same time, OKEx CEO Jay Hao also views the pandemic as a key catalyst for the retail investing boom. He noted that the Federal Reserve’s large‑scale liquidity injections last year accelerated the mainstream adoption of crypto assets and prompted more platforms to grant ordinary users direct access to stock‑trading functions, thereby democratizing investment opportunities.
The coronavirus’ impact on personal finances ranged from salary cuts and unpaid leave to outright unemployment, prompting many to seek supplemental income streams outside the traditional “9‑to‑5” job, which in turn sparked interest in crypto assets.
Integrating Crypto Assets into a Hybrid Portfolio
Robinhood accounted for over 60% of the new investors added in 2020, giving it a unique advantage in profiling novice traders. In an official blog post from early April, the platform claimed that its users are driving a demographic shift in the financial markets. Charles Schwab’s survey labels this cohort as “the first‑generation investors,” with a median age of 35, right at the intersection of Millennials and Gen Z.
This generation shows an especially strong appetite for crypto assets. A research report co‑authored by OKEx and blockchain analytics firm Catallact shows that in Q1 2021, retail trading activity in the Bitcoin (BTC) market already outpaced that of institutional investors. Robinhood also disclosed that 9.5 million customers engaged in crypto trading during the same period, a figure six times its total customer base at the end of Q4 2020.
Beyond traditional broker‑dealers, payment platforms are also entering the crypto arena. Venmo and PayPal have shifted from a cautious stance to an aggressive rollout of digital assets, viewing them as a potential high‑growth revenue stream.
Outside the United States, the retail crypto‑trading frenzy is likewise spilling over into Asian markets. One of South Korea’s largest exchanges, Upbit, saw its primary banking partner K Bank turn a ≈ $8.9 million loss in 2019 into a profit within a year thanks to the rapid rebound of crypto services, and the bank is now preparing for an initial public offering (IPO).
What About Financial Literacy?
Regulators’ concerns about retail crypto investment have not diminished despite the boom. In February 2022, Thailand’s Finance Minister Arkhom Termpittayapaisith warned that speculative behavior by retail participants could pose risks to the nation’s capital markets. The UK’s Financial Conduct Authority (FCA) similarly cautioned in January 2021 that, given the high volatility of crypto assets, investors could potentially lose their entire investment.
In addition to volatility worries, regulators are focused on the inexperience of retail investors. The Thai Securities and Exchange Commission attempted to introduce qualification thresholds for crypto investors the same year, only to encounter strong backlash from the local crypto community. Hong Kong is also considering a minimum‑income requirement to restrict retail participation, and a possible blanket ban that could strip roughly 93% of the local population of investment eligibility.
The GameStop saga remains a textbook example of the financial‑knowledge gap. In early 2021, a wave of retail traders, galvanized by the Reddit subreddit WallStreetBets, jointly targeted the short‑selling hedge funds that had bet against GME stock, achieving a short‑term rally. The episode demonstrates that the “financial‑knowledge gap” among retail participants is not merely a lack of awareness, but a structural issue tied to information transparency and entry barriers within the traditional financial system.
Charles Schwab’s research further reveals that novice investors still have a strong appetite for educational resources. About 94% of respondents expressed a desire for more research tools and information to support their decision‑making. Andrew Danna, senior vice president of retail client experience at the firm, stated:
“Since they have already stepped onto the investment stage, ‘first‑generation’ investors are eager to continuously learn and refine their strategies, aiming for long‑term wealth accumulation.”
Surveys show that this cohort is not blindly chasing high returns; rather, they tend to adopt a more cautious approach once they receive professional guidance.
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This concludes an in‑depth analysis of “Crypto Assets Leading the New Generation of Retail Investors.” For more trends and insights on crypto assets, stay tuned to Bitaigen’s upcoming reports.
Note for U.S. readers: When dealing with fiat transactions, use USD and SEPA/SWIFT where applicable. U.S. residents must use Binance.US rather than the global Binance platform. Crypto gains may be taxable under local jurisdiction; consult a tax professional for guidance.
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⚠️ Risk Disclaimer: Crypto prices are highly volatile. This is not investment advice.
