October 20, 2021

Young UK cryptocurrency investors are driven by hype

Young UK cryptocurrency investors are driven by hype

The UK Financial Conduct Authority (FCA) surveyed 1,000 people aged 18 to 40 who invested in high-risk assets, such as cryptocurrencies or Forex products.

58% of respondents agreed that they were prompted to make the decision by streams of posts about certain investments on social media, news sources or from others.

76% of investors said they were driven by competition from friends, acquaintances, family and past investments. 68% compared it to gambling.

However, only 21% of survey participants considered holding on to their recent investments for more than a year.

The FCA believed that investors in high-risk products were more aware of them than the general public. However, according to the survey, 69% of respondents mistakenly believed that cryptocurrencies were regulated by the authority.

As a result, they were unlikely to understand the lack of investor protection and the risk to their money, the FCA said in a statement.

The regulator has launched a five-year, £11 million InvestSmart awareness campaign to raise consumer awareness of high-risk investments.

We are seeing more and more people chasing high returns. But that can also mean higher risks. We want to give consumers more confidence in investing and help them do so safely by being aware of the level of risk, said FCA director of markets Sarah Pritchard.

Recall that in September FCA chief executive Charles Randall said the regulator should increase protections for consumers investing in cryptocurrencies without a proper understanding of the risks involved, but not go to extremes.

Jack Evans

About the author

I became a crypto asset owner in 2014, when the industry was in its infancy. Before that, I was working in the classic US and European stock markets. Since then, I have gained extensive experience in both cryptocurrency investing and day trading. I am happy to share with readers my experience with crypto exchanges, DeFi and NFT instruments. 

View All Posts By Jack Evans