eToro’s user-friendly trading environment is facilitating greater women participation in the market
By MARK RAO / Pic By AFP
Once a boys club and the domain for the ultra rich, the world of Wall Street is being accessed by more and more women investors, with cryptocurrencies helping to tear down the barriers further.
eToro Asia MD Jasper Lee said investing has long been a male-dominated sector, but a changing trend has been observed where more women are using the company’s social trading platform.
This has led to an increasing number of female “popular investors” — traders who earn a second income by being followed and copied by other eToro users — on the platform, he said.
And cryptocurrencies — in spite of its regulatory ambiguity in many countries and dizzying volatility, including in Malaysia — is proving to be the gateway to the wider world of the financial markets.
Lee said cryptocurrency has challenged the belief that investing is an activity reserved for the wealthy and is opening up more space for women to invest in the financial markets.
“Cryptocurrency is relatively new and has been a good way to access trading for first-time investors who might have previously seen investing as too complicated for an average person,” he told The Malaysian Reserve.
“In addition, given that there are no geographical restrictions, cryptocurrencies can be used for wealth transferring, especially cross-border payments.”
He said this has enabled cryptocurrencies to become mainstream and gain more investor interest.
Cryptocurrencies are essentially digital cash traded on a decentralised system. The often cited but frequently misunderstood bitcoin is the first of its kind when it appeared in 2008. Bitcoin has since emerged from obscurity and is part of a US$135 billion (RM550.8 billion) industry today.
The image of the overnight bitcoin billionaire is now gradually giving way as massive negative swings in the cryptocurrency markets are causing traders to venture into more stable investments.
“Since the bearish market of crypto, we have seen a lot of crypto investors starting to diversify their portfolios into other financial markets, such as stocks,” Lee said.
“As crypto tends to be more volatile, some investors might decide to try other asset classes that are more stable.”
eToro currently hosts over 10 million users globally, with 73% of new investors having joined the platform in 2017 and 2018 purchasing crypto assets. Of this, 11% then went on to invest in other asset classes such as equities, commodities and currencies.
This trend is matched by its user bases in China and Asia, which further boast higher women participation at 16% and 14% respectively against the 8% global average.
While the numbers across Asia are promising, it still narrow down to a gender gap in the financial market. Malaysia is of no exception as women only make up two-fifths of the country’s labour force despite comprising half of the Malaysian working-age population, according to Khazanah Research Institute.
The World Economic Forum’s 2018 Global Gender Gap report further highlighted that Malaysian women are not only less represented in the workplace, but earn 23% less on average than men.
The glass ceiling in the investing world is not as perceptible, but is by no means illusory as the numbers readily attest to: Women invest 40% less than men do on average, according to digital wealth manager Wealthsimple.
What is difficult to dissect is the elaborate yet elusive web causing the discrepancy as there are technically no tangible barriers preventing women from investing in the financial markets. Markets recognise money and not gender or ethnicity.
But the reality is that women continue to earn less than men do on average in the workplace. Earning less means less money to save, and consequently, less money to invest.
Women are then likely to be more conservative in managing their money and averse to risk which the financial markets are abound with.
This is being challenged by social trading platforms like eToro, digital wealth managers and robo-advisory firms which provide low-entry costs to access the financial markets and demonstrate that risk is not necessarily a bad thing when it’s well managed.
Lee said eToro’s user-friendly trading environment is not only allowing the wider public access to the financial markets, but facilitating greater women participation in the market.
“eToro empowers people to invest by giving them access to the assets they want,” he said.
“From cryptos to equities, we make buying and selling easy, and open up the shared knowledge of our community.”
Investing is no longer perceived as a tool for the rich to get richer, but a legitimate avenue to grow one’s savings and plan for retirement. The low representation of women in the investing world is worrying as it robs them of this avenue.
Meanwhile, the image of Wall Street as the exclusive playground for rich males remains, perpetuated by popular media (The Wolf of Wall Street) and Wall Street itself whose response to the #MeToo movement was to avoid women like the plague.
Disruptive platforms like eToro and robo-advisory firms are carving out a new and inclusive space in the investing world, one that challenges the exclusivity embodied by Wall Street.
Given the speed by which technology is both introduced and adopted, gender representation in the financial world could outpace and exceed that of the workplace.