In case you missed it, click to read part 2 of this article series
Speaking about the power of the crowd, Yoni Assia, CEO of eToro, explained that the broker was founded with the mission to “open the global markets for everyone”. Assia explained that the firm believed that there was growing demand of people around the world to trade products and markets out of their home markets such as “Chinese traders wanting to invest in US stocks and global demand to trade Gold and Oil”.
In addition to wanting to open up the global markets, eToro believed that it was important for traders to leverage the crowd and outside networks to optimize their trading. However, according to Assia, traders rarely are sourcing information beyond their networks and relying on information that is sourced from like minded groups and individuals.
Assia described this problem as “living in an echo chamber”. For example, people are in their own echo chamber of where they live. Therefore, they will hear their friends and broker analysts recommend tend to recommend local stocks and currencies that are viewed as safer. However, Assia stated that investors from around the world “would probably be better off just buying Facebook stock than investing in local products”.
As a personal example to prove his point, Assia cited his own view on ethereum and living in a bitcoin focused echo chamber. An early investor and adopter of bitcoin in the 2012, Assia was very involved in the bitcoin world. Part of this early group was Vitalik Buterin who had founded ethereum and had collaborated with Assia on the Colored Coin project.
Despite personally knowing Buterin, as ethereum began to grow in prominence in 2015, Assia failed to become a meaningful investor of ethereum. According to Assia, this was due to himself living in a bitcoin echo chamber, of which his friends and cryptocurrency contacts that he discussed ethereum with played down the new currency in favor of bitcoin and the blockchain.
Citing the missed opportunity of the wisdom of the crowd, Assia stated that “it wasn’t until eToro launched (ethereum trading) that I got to see lots of discussion around ethereum that changed my perspective.
view-source:https://www.investing.com/studios/article-28