At the onset of the pandemic in 2020, the daily lives of virtually everyone around the world radically changed.
Commutes to the office ceased. Concerts and dining outings were canceled.
For some, punting stocks and cryptocurrencies on online brokerages filled the void. That fundamental shift reshaped US equity markets, ushering in an era dominated by Wall Street Bets, meme stocks, and cryptocurrency. Indeed, retail trading has yet to subside even as economies reopen. Monthly net purchases of US equities by individual investors have stabilized at around $20 billion—a surge from the pre-pandemic norm of about $5 billion.
On this episode of The Scoop, eToro's newly-appointed US lead Lule Demmissie explained why she doesn't see retail's newfound presence in the market subsiding anytime soon, and how eToro plans to capitalize on growing its business related to cryptocurrencies and stock trading.
"What you're seeing is the sustainability of that user base staying engaged, waiting for dips, getting in the markets when necessary," said Demmissie, former Ally Invest president and TD Ameritrade managing director.
"Ultimately they're sticking around and they're engaging every time there's volatility," she added.
Demmissie said that the collective mind of the retail crowd could have more insight than institutions previously may have thought.
"I'm originally from Ethiopia, right? So I grew up in the throes of a revolution. So the idea of mob rule is something that is like embedded in my DNA as to be averse to it," said Demmissie.
"There is a self-made mechanism, a self-clearing mechanism that is happening in social, where there is a balance that takes place within the crowd, where the crowd gets smarter and smarter, and the synthesis of it afterwards becomes something that is really interesting to listen to."
In this episode, Demmissie and Chaparro also unpack:
- eToro's roadmap in the US and the importance of social media elements in its strategy
- How the transition of wealth from older generations to newer ones is disrupting the financial services industry
- Why Demmissie believes the metaverse is going to be "unbelievable"
- How skepticism "makes a market"
- The ways digital assets can make the world more equal
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