A ground-breaking study by Broadridge Financial Solutions, a global FinTech leader, has uncovered that key metrics essential for comprehensive crypto asset evaluation are not the primary focus for a majority of investors. This is despite a burgeoning interest in the realm of crypto assets.
The unique study was conducted collaboratively with Dr. Chris Brummer, Agnes Williams Sesquicentennial Professor of Financial Technology at Georgetown Law. The survey involved 2,000 crypto market participants from the US, UK, and Canada, with respondents polled on their investment decision-making process and information sourcing.
Remarkably, the report noted that crypto asset investors and prospects mainly prioritise traditional factors such as risk factors and security (54%), financial overview like cash flows (52%), and management team holdings (43%). On the other hand, crucial crypto-specific metrics such as tokenomics (16%) and network performance (28%) were not even within the top five concerns.
Broadridge Agnes Williams Sesquicentennial Professor of Financial Technology Dr. Chris Brummer said, “The survey data reveal that many investors prefer traditional finance metrics, and emphasise them over other factors that impact crypto specifically.”
The study throws light on a possible lack of comprehension among investors regarding the crypto-native elements vital for understanding crypto assets. For instance, network performance can offer a live perspective on the platform’s operation, user interaction, and the number of active projects – all crucial data for any investor. Similarly, a coin’s tokenomics can influence and predict its current and future supply.
Interestingly, over 65% of respondents considered their holdings as long-term investments, opposing the common belief of most participants being speculators. Nearly half (47%) mentioned their investments in the crypto space were educational, implying a “learning by doing” approach.
Broadridge Chief Digital Officer Rob Krugman said, “To help better inform and educate investors, metrics that track crypto asset performance should be standardised, better disclosed and made more easily accessible, especially for retail investors needing the most relevant information and support possible to make informed decisions. For any market to survive and grow, you need trust, and trust isn’t possible without transparency.”
The survey further explored how investors stay informed about crypto assets, questioning respondents about their information sources and preferred timeframe for updates. Prospective investors are broadly seeking performance indicators, with more experienced ones focusing on off-chain data location, typically the asset provider’s website or a third-party data provider.
Concerning update frequency, just under half of all respondents preferred at least quarterly or monthly updates, with 27% wanting updates as information changes. The fast-paced nature of the market necessitates timely information provision to holders, ensuring not just updates on their holdings, but also a thorough understanding of the information and its implications.
Head of Corporate Strategy at Broadridge, German Soto Sanchez, said, “This is the first ever study to survey the disclosure preferences of crypto holders and investors, and a project we are proud to have led during this time of intense regulatory discussion.”
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