Bitcoin, etherium and other cryptocurrencies popularity surge, But many don’t understand the risks

0
23

The numbers of people buying highly risky cryptocurrencies such as bitcoin or etherium has surged in the past year, research from the Financial Conduct Authority showed today.

Research showed the numbers of people owning crypto currencies has increased sharply from 1.5 million people in 2019 to 2.6 million now.

Awareness of cryptos increased dramatically due to increased advertising and media coverage; when the sample was polled last year, 58% of respondents did not know what cryptos were compared with just 27% today.

Most people who buy cryptocurrencies such as Bitcoin or etherium are earning well below £100,000, with nearly a third earning less than £30,000, giving the lie to the impression some advertising makes that they are commonly traded by sophisticated investors.

Research from the Financial Conduct Authority found only 9% of crypto owners earned more than £100,000 – far fewer than the 15% who were earning under £20,000.

The FCA study implied that a worrying number of unsophisticated investors cannot afford the losses that often feature in crypto markets and may not understand the risks.

Those who were least likely to understand that bitcoin and other cryptocurrencies were unregulated and therefore unprotected investments were more likely to be from the C2DE social bracket, including manual workers, state pensioners and those unemployed or on benefits.

Overall, typical cryptocurrency owners are:

:: 79% male

::69% over 35

::27% in the C2DE social grade with a lack of any basic understanding about what they were investing in.

However, while the risk to unsophisticated investors appears high, most cryptocurrency owners hold only small sums and are aware of the risks and lack of regulatory protections.

Around 35% of owners had bought in after seeing an advertisement, with that number higher for those who were naïve about the product and more likely to regret having invested.

The study also found most consumers treat them as a gamble rather than an investment, and only 15% regret having bought them.

Source: EveningStandard

This site uses Akismet to reduce spam. Learn how your comment data is processed.