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Crypto Copy Trading & Social Influence a Big Hit for Gen Z

Published August 4, 2023 12:45 PM
Teuta Franjkovic
Published August 4, 2023 12:45 PM
Key Takeaways
  • 44% of Gen-Z users of copy trading platforms show the trend’s acceptance among younger traders
  • 91% of duplicate trading transactions are in futures trading, compared to 9% in spot trading.
  • Despite its allure, copy trading has dangers due to inexperience

Copy trading solutions, which were once hugely popular in the contract for difference (CFD) market, are also enthralling cryptocurrency users. According to the most recent Bitget exchange research, investors are increasingly using copy and social trading in the world of digital assets.

According to the study , Generation Z traders, who account for 44% of all copy trading users, are leading this trend. Additionally, traders from Africa and the Commonwealth of Independent States (CIS) countries demonstrated a strong interest in this trading approach, notwithstanding the participation of other age groups.

Bitget graph on copy trading usage
Credit: Bitget

In the first half of 2023, the study evaluated  the trading activity of a wide range of active cryptocurrency traders. Using copy trading strategies, more than 109,000 traders made money, generating cumulative profits of more than 74 million USDT.

The study showed that copy traders had a high success rate: 93% of futures traders and 82% of spot traders made money employing this tactic.

BTC and ETH Among the Most Copied Trades

The most often exchanged asset via copy trading was Bitcoin (BTC), followed by Ethereum (ETH) at 44%. Geographically, the majority of copy traffickers come from Southeast Asia (19%), East Asia (26%), and Western Europe (31%).

Africa leads the pack in terms of copy trading interest despite having fewer users, highlighting the region’s developing cryptocurrency markets.

Gracy Chen, the Managing Director of Bitget, said in a statement  following the release of the survey, “These survey results are indicative of the general market sentiment. Users who do not have a deep understanding of trading are now able to access and profit from such strategies as copy trading thanks to the use of advanced tools, including AI-based ones.”

Generation Z Leads

While a Fool survey  conducted a year earlier found that 91% of Generation Z respondents use social media as their primary source of investing information, the Fidelity Investments 2022 Investor Insights Study  revealed that 56% of Generation Z and Millennials seek investment advice from social media influencers.

Users carefully consider the trader’s rating, financial performance, and choice of investment items when choosing expert traders to mimic.

The survey found that 44% of all copy traders on Bitget are members of the Gen Z demographic, who are frequently tech proficient and social media-influenced.

They are followed by people in the 25–35 age range (32%), those in the 35–55 age range (17%), and those over 55 (7%). Bitget’s copy trading platform is used by over 72% of traders under the age of 25, compared to 65% in the 55-64 age group.

itget Copy Trading Users
Credit: Bitget

“Users are interacting increasingly more as a whole community, and social trading is a significant force that is reshaping the industry environment. The general tenet of our ‘Smarter Trading’ slogan aligns with our commitment at Bitget to keep enhancing our copy trading feature, Chen continued .

The Insight Partners’ analysis, which forecasts that the social trading market would rise at a CAGR of 7.8% and reach $3.77 billion by 2028, up significantly from $2.2 billion in 2021, supports Bitget’s findings.

The growing number of exchanges introducing copy trading into their offerings is a sign of the practice’s growing acceptance among cryptocurrency traders.

The OKX platform gave its global user base access to services for duplicating the positions of other traders at the beginning of this year.

Regulators are, however, paying more attention to the sector. ESMA declared its intention to highlight improved investor protection for people who use copy trading in March. Given that every third investing firm in the FX/CFD market currently offers it in some capacity, this is very pertinent.

Why Copy Trading?

In retail, copy trading has become one of the most highly sought-after services. Although it has gained a lot of traction in traditional markets, its presence in the cryptocurrency space is still in its early stages and is only now beginning to acquire traction.

The social trading behaviors that were common in the early Internet period, when seasoned traders kindly shared their trading ideas on forums, are where copy trading first emerged.

Later, the popularity and success of Reddit traders  served as fuel for the boom. Only the technological advancement of copy trading made it possible for novice traders to carry out the deals of seasoned professionals instantaneously.

Even though real-world tools like ChatGPT still fall short of achieving perfect accuracy and dependability, the value of automated solutions incorporating human intelligence is increasingly understood. The popularity of copy trading, as a prime example, is rising in the cryptocurrency market, highlighting the urgent need to make this complex process understandable for those who are new to trading.

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