Tectonic Shifts in the Online Trading Industry
The online trading industry saw a dramatic increase in the number of users during the coronavirus pandemic. As people were forced to stay at home in many parts around the world for at least a couple of months, the Internet became the “gate to the outside world.”
Making money online is nothing new – there is a huge industry out there, ranging from sports betting, online gambling to day trading. Obviously, each industry has its own characteristics, but they all address one type of individual – the one willing to take a risk to increase its capital.
The coronavirus pandemic saw the rise of the day trader – a trend especially visible in the United States. Trading app Robinhood barely managed the increasingly high number of new users, often being quoted in the U.S. media as responsible for the equity market’s advances/declines.
However what caused such a shift to the online trading industry?
Sports Betting Websites Traffic Down Dramatically During the Pandemic
The momentum is in for online trading. As the pandemic spread all around the world, sports events were the first ones to get canceled. Imagine just that the UEFA Euro 2020 football cup got canceled due to COVID-19 – and so did sports betting websites revenues and traffic. As events were postponed or canceled around the world, the industry lost its users.
Where to turn to? One explanation is casino and poker sites. Indeed, they have seen a rise in the number of visits, while gambling sites lost traffic during the pandemic. Yet, it pales in comparison with the number of newcomers to the online trading industry.
The explanation may be that trading is not gambling. You do not need chances to make a living, but you need to put in the working hours to come up with a technical or fundamental strategy, or both, to beat the market.
It is an industry based on knowledge and information. Like in any business, experienced traders have an easier time to handle the market pressure. But you have to start somewhere, as everyone did at some point in their trading career.
This is online trading’s big moment. It took an unfortunate event like a pandemic to create a tectonic shift in the online money-making industry, but here we are. Getting the taste of trading/investing online, many newcomers to the industry will not return to their old habits once the pandemic is behind.
Which makes the online trading industry one of the few winners of the current health crisis.