The European continental P2P lending market is “subject to localized randomness, especially in times of crises,” according to an update shared by Robocash.
Robo.cash analysts studied “the exposure of the continental European P2P lending market to the randomization effect.”
The analysis included 54 European platforms with available statistics on reinvestment volumes.
Robo.cash analysts noted in a blog post:
“We ran nearly two dozen statistical criteria to detect patterns such as trend, cyclicality, and seasonality. In fact, the absence of these patterns is the main feature of randomness.”
The study published by Robocash found market patterns “such as a non-linear trend, deterministic 10-month seasonality and 2-year cyclicality.”
The Robo.cash analysts said that “this is enough to speak about the “non-random” nature of the industry’s behavior.”
But at the same time there are periods of “localized randomness in the P2P market. In the aggregate of the test results, these are periods from September 2019 to August 2020 and from September 2021 to August 2022.”
The analysts also mentioned that in a sense, these were “black swans” that “changed investors’ expectations and their strategies.”
Overall, the European P2P market is expected “to continue its systematic development in 2024. Robo.cash specialists also note that the current increased volatility may intensify the impact on the randomness of market behavior.”
In another recent update, it was noted that European investors are starting to make “bold moves.”
Anastasia Palamarchuk from the Robocash Team said that the risk profile of Europeans began to change from conservative to aggressive “by expanding the share of their funds in the stock market and alternative investments.”
European household assets have “grown by 51% over the past 10 years. By the end of H1 2023, they totaled €34.08 trillion.”
This is “approximately €93k per citizen aged 18+ compared to €62k a decade earlier.”
There have “been some interesting changes in the structural view of the portfolio. Over the last 10 years, cash has smoothly moved from less risky instruments (Debt securities, Deposits, IPSG) to the most risky ones (Equities, FDESO, Other assets). The share of the former in the portfolio has decreased by 7.8% since 2013. While the categories of the “risky group” show steady growth.”
Over 10 years, Equities have risen “from 26.9% to 33.4%, FDESO from 0.01% to 0.04% and Other assets from 2.9% to 3.4%.”
“This reflects the long-term sentiment of individuals for higher yields,” commented Robocash analysts.
The share of risk assets is “dominated by households in several countries at once.”
Among them “are Denmark, Sweden, the Netherlands and Belgium.”
The analysts added:
“These states are, for the most part, the richest in Europe in terms of GDP per capita. They also share high life expectancy and access to all global financial instruments and types of investments due to their developed economies.”