The new survey provides a grim picture of the motivations and knowledge of British cryptocurrency investors when it comes to their investments.
21% of British cryptocurrency investors know almost nothing about them
Almost two out of five (36%) small cryptocurrency investors in the country admitted that their understanding of the sector was “bad or non-existent” at the time of the first investment. Over time, 21% of investors holding a crypto still rate their knowledge of the sector as low.
The survey was conducted by Oxford Risk, a commercial software company that focuses on products for asset managers and financial services companies. Although small – only 1,038 respondents – the research sample for the survey was allegedly balanced to reflect the demographic profile of the United Kingdom.
In addition to the low level of investment literacy in terms of cryptocurrency, the survey showed that the demand for digital assets was driven by FOMO. Approximately 35% of respondents said they had read about soaring cryptocurrency prices online and 15% said they were motivated to invest in the sector with their friends or family. Greg B Davies, Head of Behavioral Finance at Oxford Risk, said:
“It’s worried that too many people are buying blindly without knowing what they’re doing and it’s being influenced by rising prices and other people who are encouraging them to go for it. It’s very worrying that people are investing heavily in cryptocurrencies and don’t understand what they bought. “
A large part is also still unsure of the future of the market: 45% said they did not know whether price appreciation would continue, 32% were not convinced and 24% believe so. Regardless, 21% of respondents plan to either buy cryptocurrencies for the first time this year or increase their current stakes.
Most investors invested a relatively small amount of cash in the sector: 81% said they had bought just a little cryptocurrency in the spirit of “we’ll see what happens,” 76% invested 5% or less of their total savings and 41% less than 1%. However, 7% of investors bet up to 20% of their funds on cryptocurrency, while 10% bet more than 10%.
According to a recent study by the British Financial Conduct Authority, 2.3 million adults in the country owned cryptocurrencies by June 2021, up from 1.9 million last year. In addition to the increased number of investors, the FCA found that average shares rose to £ 300, up from £ 260 in 2020.
This increase was accompanied by an increase in awareness, with 78% of adults in the UK saying they had heard of cryptocurrency – again 73% more than in the previous year. However, like Oxford Risk, the FCA pointed to a marked decline in cryptocurrency, which similarly suggests that many British cryptocurrency investors did not understand technology and the sector.