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It is often assumed that millennials are more interested in cryptocurrency trading and saving. In addition, a top regulator in the United Kingdom conducted new analysis to better grasp those buyers. The Financial Conduct Authority (FCA) discovered that its customers are “younger” and a “more diverse group,” despite the fact that crypto trading is a “high-risk investment.”
According to the findings of this poll, almost two-thirds (59%) of respondents said that a lack of investment capital would have a “fundamental effect on their present or future lifestyle.” The “enjoyment of the excitement of investing” and psychological considerations such as the “status that comes with a feeling of ownership” are key explanations for respondents’ investment decisions.
Furthermore, 38% of those polled did not have a “single practical justification for investing in their top three.” According to the report:
“This is particularly true for those investing in high-risk products for whom the challenge, competition, and novelty are more important than conventional, more functional reasons for investing like wanting to make their money work harder or save for their retirement. “
From August 2020 to January 2021, FCA partnered with the consultancy ‘BritainThinks’ to interview 517 “self-directed investors.” A total of 218 people were interviewed, with those being 45-64 years old and 53 being between the ages of 18 and 29. About 166 individuals were between the ages of 30 and 44.
These investors, according to FCA, have a “strong dependence on gut instinct” and “rules of thumb.” Almost 78 percent accepted that “I trust my intuition to tell me when to buy and sell,” and four in five acknowledged that “there are certain investment forms, markets, or businesses that I consider a ‘safe bet.’
According to the study, this new category of “self-investors” is more reliant on social media for tips and news. Adding to that, Sheldon Mills who is the Executive Director, Consumer and Competition at FCA was worried that some investors are being tempted – “often through online adverts or high-pressure sales tactics” – into buying “higher-risk products that are very unlikely to be suitable for them.”
Meanwhile, crypto investors continue to grow; Crypto.com reported last month that the global crypto population increased by 15.7 percent in January alone. As of January 2021, there are 106 million crypto users worldwide. Simultaneously, trading site Robinhood recently attracted six million new users to its crypto app.