The market frenzy during last year’s bull run brought new investors into the cryptocurrency market. However, the situation was very different from one continent to another. If the American and Asian markets have exploded, Europeans are taking longer to position themselves. However, countries like Germany are showing a growing interest in crypto assets.
- More and more seduced Germans
- The French, shy investors?
- Are European institutions the enemy of cryptocurrencies ?
The Germans, pioneers of investment in crypto-currencies in Europe
According to a report by Kucoin, the richest country in Europe is gradually converting to cryptocurrencies . Indeed, 44% of Germans are “motivated to invest in cryptocurrencies to be part of the ‘future of finance,'” while more than a third or “37% of German crypto investors trade crypto – currencies for more than a year”.
Kucoin CEO John Lyu told CoinTelegraph that the younger generation has opted for an accumulation strategy. In fact, for them it is a savings. This will make it possible to finance the different stages of their life, including retirement. They thus have less and less confidence in the social protection that prevailed until then. However, Lyu also warns these new investors. There is still no real regulation vis-à-vis crypto-assets.
Germany has already recognized bitcoin as a unit of value. But the entire cryptosphere lacks precise regulation. For Florian Döhnert-Breyer, managing director of F5 Crypto, “Germany is a model for other EU countries, whose populations are generally more open to long-term investments”. Paradoxically, women are in the majority in this new type of investment (69%) unlike traditional finance. While constantly recalling the risks associated with this type of investment, BaFin, the federal financial supervisory authority, authorized the neobank N26 to launch trading from 2022.
The French timidly enter the trading of crypto-assets
Compared to the Germans, French investment is still very moderate. In 2021 in France, 8% of French people said they had already invested in cryptos, according to a KPMG / Ipsos survey carried out for the Association for the Development of Digital Assets (Adan). However, this relatively low figure is not the only indicator to consider. In 2020, only 3% of French people had invested. In addition, this progression allows investment in crypto – currencies to exceed investment in equities.
In fact, the French do not have the culture of financial investment and remain accustomed to traditional savings. We must therefore see in this evolution a new trend that is emerging. Paradoxically, it was the NFTs that were the gateway to this field for many of them. Indeed, 15% say they have already owned an NFT. In fact, the profile of French crypto-asset investors is different from stock market investors. They are younger, more feminine and less well off financially.
These traits are partly explained for two reasons. It is easier to invest in cryptocurrencies than in the stock market because you only need to download an application like Coinbase, Kraken or Binance. In addition, the gaming aspect linked to the handling of crypto- currencies also appeals to many young people, who are more comfortable with certain DeFi mechanisms. Despite this change in the profile of investors, the share devoted to crypto-assets remains secondary in their investment strategy. Increasingly, cryptocurrencies are becoming for some French people a gateway to other forms of savings.
Europe at a crossroads
More generally, Europe has an ambivalent relationship with cryptocurrencies . Indeed, if more and more institutions and individuals are positioning themselves on crypto- currencies , European governments and institutions are warning all these investors. Many newcomers to the cryptocurrency market have indeed lost out since successive market declines. A study by IW Capital shows that only 5% of English investors make a profit from crypto-assets.
In addition, regulations are still unclear or unfavorable to cryptocurrencies . Whether at the level of mining or investments, many arbitrations will take place. We should therefore expect a standoff in the coming months before a clear direction is taken. The war in Ukraine will undoubtedly accelerate things. Indeed, payment in cryptocurrency is seen as a possibility when the banking system is failing. By asking for cryptocurrency donations , Ukrainian President Zelensky has opened a new stage in the adoption of this new form of asset.
European institutions are struggling to choose a clear position on cryptocurrencies. Yet more and more Europeans have decided to take the plunge. Crypto-enthusiasts or simply curious, these new investors are generally younger and more feminine. However, the comparison between the case of Germany and that of France shows that there are still many disparities between the countries. Given the evolution of the adoption of crypto-assets in 1 year, we can bet without too much risk that this situation is likely to change very quickly.