By copying trades of experienced traders, rookie investors earned about $74 million this year. About half of copy traders are users under 25 years old.
According to Bitget’s report, the popularity of copy trading is actively growing, as copying trading strategies of influential personalities and experienced traders brings profit. Thus, copy traders managed to earn over $74 million this year.
Bitget data shows that copy traders prefer trading in the futures market. Thus, derivatives trading accounts for 91% of all copy trading transactions, while the spot market accounts for only 9%. Moreover, this year about 93% of traders engaged in trading in the futures market, and 82% of participants of transactions in the spot market achieved profitability due to copy trading.
The preferred assets for copy traders in both futures and spot markets are BTC — 52.2% and 16.5%, respectively, and ETH — 43.9% and 10.8%.
As for the geography of copy trading users:
- 31% — Western Europe;
- 26% — East Asia;
- 19% — Southeast Asia;
- 10% — Latin America;
- 5% — CIS countries.
However, as for the interest of users in the possibility to use copy trading for profit, the situation looks a little different. The strongest interest is shown by respondents from Africa (62%), CIS countries (53%), and Western Europe (40%).
The Bitget report also notes that younger investors show the greatest interest in copy trading. About 44% of traders using such a strategy are under 25 years old, and another 32% are between 25 and 35 years old. The older generation is less interested in it. Only around 17% of copy traders are users between 35 and 55 years old, and just 7% of the total number are over 55 years old.
Copy trading is a method of investing that originated from social trading and involves algorithmic repetition of trades made by other traders. According to analysts, the popularity of copy trading among Gen Z is directly related to:
- popularization of cryptocurrencies;
- the development of social networks and active participation of Gen Z in them;
- the opportunity to mitigate risks for inexperienced traders.
Copy trading is applicable to both cryptocurrency assets and stock market trading. However, the CFA report shows that crypto investments are the most popular among Gen Z. In the United States, 44% of young people started their investor journey with cryptocurrencies, 43% in the United Kingdom, and 35% of Generation Z representatives in Canada admitted that their first investment experience involved cryptocurrency. The commitment to crypto investments among the younger generation is also demonstrated by a Financial Industry Regulatory Authority (FINRA) survey, showing that 55% of Gen Z in the U.S. chose cryptocurrency as their first investment.
More remarkably, a Forbes Advisor study conducted earlier this year found that about 80% of Zoomers and Millennials get financial advice via social media. At the same time, half of them said that they made profits thanks to the advice of experienced traders on YouTube, Reddit, and TikTok.
A study by scientists from the University of Pennsylvania showed that the discussion of crypto projects in social networks affects returns on investments in them.
