Investment apps have recorded a steady growth in recent years as the sector continues to record competition between different players. The industry is also witnessing an emerging trend where traditional investment apps are now lagging behind fast-rising cryptocurrency applications.
Data acquired by Finbold indicates that cryptocurrency apps dominated the share of the United States’ top 50 asset management apps during the first half of 2021 at 51%, representing 2.6 times growth from last year’s figure of 19%. Interestingly, crypto apps surpassed stock trading apps for the first time in 2021. This year, the stock trading apps had a share of 43%, while the figure was 68% last year. Elsewhere, advisory apps accounted for 5%, while Forex stood at 1% in 2021.
Elsewhere, between Q2 2020 and Q2 2021, the U.S. quarterly downloads of top 50 asset management apps surged 152% for both iOS and Android operating systems. During the second quarter of last year, Apps Store downloads stood at 9 million while Google Play had 4 million. In 2021, AppStore and Google Play recorded 18 million and 15 million, respectively. The numbers are based on Sensor Tower data.
Why cryptocurrency apps surpassed stock apps
The growth in cryptocurrency trading apps downloads correlates with a growing digital currency market. The growth has been occasioned by the increasing adoption and cryptocurrency investment. Over the past year, the cryptocurrency sector has witnessed unprecedented growth with an influx of retail and institutional investors, resulting in the market’s sustained bull run for the better part of 2020.
The entry of multiple institutions into space has resulted in the cryptocurrency sector earning credibility. Based on historic trends, the industry promises lucrative returns in a short period compared to the traditional sector.
The data indicates that stock trading apps have been dominating the asset management space in recent years. However, the significant shift from stock apps to crypto apps was partly due to the coronavirus pandemic. During the first half of last year, the stock market crashed, with most shares trading at their historical lows. On the other hand, cryptocurrencies remained resilient and began building momentum towards the end of 2020, culminating in the recent bull run.
More people also had time to learn and take part in stock trading and crypto investment following the pandemic lockdown. Furthermore, increasing financial literacy has also played a key role in surging interest in the apps.
The position of cryptocurrency app downloads reflects the increasingly mainstream status of the digital currency sector. Amid the previous years domination by stock apps, cryptocurrencies had not hit the mainstream mainly due to a lack of institutional investors.
Amid the growth in the crypto market, the application’s popularity emanates from its ability to simplify purchasing digital currencies by helping users consolidate their diverse portfolios. At the same time, the apps offer improved portfolio management tools.
In the coming years, the demand for crypto asset management apps is expected to grow significantly with the regulators moving towards defining the laws that govern the sector. However, amid the current uncertain regulatory framework, scams are emerging in the industry, an aspect that might derail growth.
Why stock apps dominated in recent years
Elsewhere, stocks are offering an opportunity for retail investors to get involved in the stock market. The popularity of stock apps stems from factors like their ability to provide commission-free services that are not common among traditional stock investment platforms.
In addition, the apps also offer commission-free services accompanied by viral expertise marketing. In return, they attract significant users with a relatively little spending.