P2P Market volumes surge October to March

What drives the ups and downs of the European P2P market? If you look closely, there’s a clear six-month cycle at play. This rhythm reflects changes in consumer habits, shifts in the economic landscape, and the timing of loan maturities on platforms. Understanding this pattern can offer valuable insights into when and why investors engage with P2P platforms.

Our analysts have taken a deep dive into the last eight years of data, analyzing investment volumes, returns, and new customer trends across over 60 continental European P2P platforms.

Their findings highlight a clear trend: market volumes generally pick up from October to March, followed by a quieter period from April to September. This pattern indicates a medium-term market cyclicality of about six months in length.

According to our analysts, 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.

These trends are driven by both platform initiatives to attract users and broader consumer habits:

So, for example, with the advent of the new year, people tend to set new goals and make financial plans. 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 P2P investing gains traction, its sensitivity to macroeconomic changes also increases. For instance, if the ECB raises its key rate, boosting yields on traditional assets, some investors might shift away from P2P, potentially impacting market volumes. Still, this relationship is more of a statistical trend than a seasonal rule.

Understanding these cycles can help platforms and investors make better decisions. Platforms can time campaigns and initiatives to align with peak activity, while investors can use this knowledge to strategically balance their portfolios. As P2P continues to mature, keeping an eye on these trends will be key to navigating the market effectively.