Once incredibly popular in the contract for difference (CFD) market, copy trading solutions are now also captivating the hearts of cryptocurrency users. Copy and social trading are increasingly employed by investors in the digital asset landscape, as demonstrated by the latest research conducted by Bitget, a crypto derivatives exchange .

The research shows Generation Z traders lead this trend, representing 44% of all copy trading users. Additionally, while other age groups participate, traders from Africa and Commonwealth of Independent States (CIS) countries showed significant interest in this trading method.

Crypto Traders Love Copy Trading

The study assessed the trading activities of a wide array of active crypto traders over the first half of 2023. More than 109,000 traders profited using copy trading techniques, amassing over 74 million USDT in cumulative earnings. The research demonstrated a high success rate among copy traders: 93% of futures traders and 82% of spot traders made profits using this strategy.

Bitcoin (BTC) was the most frequently traded asset via copy trading (52%), trailed by Ethereum (ETH) at 44%. Geographically, most copy traders hail from Western Europe (31%), East Asia (26%), and Southeast Asia (19%). Even though Africa represents a smaller share of users, it tops the list in terms of interest in copy trading, signifying the emerging nature of crypto markets in the region.

"These survey results are indicative of the general market sentiment,” Gracy Chen, the Managing Director of Bitget, commented on the release of the survey. “The use of advanced tools, including AI-based ones, is making such strategies as copy trading both accessible and profitable for users who do not have extensive knowledge of trading.”

Gen Z Takes the Lead

The study revealed that Gen Z users, who are typically tech-savvy and influenced by social media, make up 44% of all copy traders on Bitget. They are followed by the 25-35 age bracket (32%), the 35-55 age group (17%), and individuals over 55 (7%). About 72% of traders under the age of 25 use Bitget primarily for its copy trading platform, with a comparable proportion of 65% seen in the 55-64 age group.

“Social trading is a major force that is shaping the industry landscape as users are cooperating even more as a holistic community. We at Bitget are determined to continue improving our copy trading feature, and that coincides with the general philosophy of our 'Smarter Trading' slogan,” Chen added.

A report by The Insight Partners supports Bitget's findings, projecting that the social trading industry will grow at a CAGR of 7.8% and reach $3.77 billion by 2028, which is a significant increase from $2.2 billion in 2021.

The rising popularity of copy trading among cryptocurrency traders is indicated by the increasing number of exchanges beginning to incorporate it into their services. At the start of this year, the OKX platform provided its global user base with access to services for copying the positions of other traders.

However, the industry is being scrutinized more seriously by regulators. In March, ESMA announced its intent to emphasize enhanced investor protection for those using copy trading. This is especially pertinent given that some form of it is now offered by every third investment firm in the FX/CFD market.