P2P market volumes surge October to March
The European P2P market clearly shows a semi-annual “wave” of activity. At the same time, it directly depends on changes in consumer habits, the macroeconomic environment and even the maturity of loans on a particular platform.
Robo.cash analysts studied the dynamics of investment volumes, profitability and new customer inflows on more than 60 continental European P2P platforms over the last 8 years.
According to the results, the main pattern identified is an increase in market volumes from October to March and a “fade” from April to September. This pattern indicates a medium-term market cyclicality of about six months in length. “The same can be said for other market parameters. For new customers, growth typically occurs between September and February with October falling out, and for market rate – between August and January with a slowdown in September.” – the platform specialists comment.
This movement of funds in the P2P market is explained both directly by the activity of the platforms themselves towards attracting customers, and by consumer habits. “So, for example, with the advent of the new year, people tend to set new goals and make financial plans.” – the analysts say. “At the same time, if any “average” investor rebalances or builds a portfolio from scratch at the beginning of the year, the share of P2P in it will be low. The capitalization of this asset still is not comparable to the stock or crypto markets. Nevertheless, it will not be zero, therefore, the activity falls on the first quarter of each year”.
As the popularity of the P2P market grows, so does its potential response to macroeconomic dynamics. For example, if the ECB raises the key rate, and with it the yields of annual securities, some investors may reconsider their interest in P2P investments. This in turn may affect the overall market volume. However, the correlation is more statistical in nature than classic market seasonality.
In addition to the factors described above, the experts also note other, less flexible ones. These include peculiarities of local legislation, influence of external events related both directly to the financial sector and other aspects of life.
A certain connection can also be traced with the maturity of loans. Thus, if a significant part of loans on the platforms have a closing date in specific months, investors receive large sums back during this period and can reinvest them promptly, increasing the total market volume.“These factors probably cannot be called strictly seasonal, but periodically they may overlap with existing seasonal patterns. In any case, in addition to seasonality, there is clearly cyclicality in the market, which has an impact on the strategy of both the platforms themselves and their investors”. – the analysts summarize.
