Representations of cryptocurrencies can be seen in this illustration photo taken in Krakow, Poland on June 29, 2021 (photo illustration by Jakub Porzycki / NurPhoto via Getty Images)
Young British investors finance investments in cryptocurrencies through a “cocktail” of credit cards, student loans and other loans, new research shows.
Interactive Investor, the UK’s second largest consumer direct investment platform, said a survey of 1,000 adults aged 18-29 found that one-fifth had invested in Bitcoin (BTC-USD) and half had borrowed to fund their investments. 23% used a credit card, 17% used a student loan and 16% used another type of loan.
27% of respondents said they used their credit card to invest in Dogecoin (DOGE-USD), 17% said they had used their student loan and 12% mentioned another type of loan.
Continue reading: Binance is stepping up its compliance strategy amid UK regulators
“Young adults are using credit cards, student loans and other forms of debt to invest is a worrying trend,” said Myron Jobson, a personal finance activist at Interactive Investor.
Interactive Investor’s survey did not provide data on whether young people were struggling with crypto-linked debt, but large swings in the market suggest that at least some may be affected.
Bitcoin hit a high of more than $ 64,000 in April before halving. Dogecoin rose from less than a cent in value at the start of the year to a high of more than $ 0.70, but has since fallen back to a trade near $ 0.23. Any investor who borrowed money to buy near the high is likely to be in trouble now.
“There is a chance that if repayments are not made your creditworthiness could be damaged, which could seriously affect your ability to take out a mortgage and access other forms of credit in the future,” Jobson said. “It’s just not worth it.”
Interactive Investors’ survey found that nearly half of Gen Z and late millennial investors got their first taste of investing through crypto. Almost half (45%) of 18-29 year olds said their first investment would be cryptocurrency. That was more than twice as much as the proportion who first invested through funds (23%) and the proportion who first invested in listed company shares (18%).
The story goes on
Reputation: What are the risks of investing in cryptocurrency?
Last month, the UK’s financial watchdog found that the adoption of cryptocurrencies has skyrocketed despite major risks. The Financial Conduct Authority estimates 2.3 million adults now own crypto assets, up from 1.9 million last year.
In contrast, the general understanding of cryptocurrencies is declining. Only 71% correctly identify the definition of cryptocurrency from a list of statements.
Continue reading: Bitcoin: what is crypto mining and can anyone do it?
“When consumers invest in these types of products, they should be ready to lose all of their money,” said Sheldon Mills, executive director of consumer and competition for the FCA, at the time.
One in ten people who heard of cryptocurrency said they knew about consumer warnings on the FCA website. Of these, 43% said they were advised against buying crypto.
In a separate survey, FCA regulated fintech Ziglu found that 24% of UK crypto investors had spent £ 100 ($ 138.37) or less on their investment. 28% spent between £ 100 and £ 500 while 23% spent £ 1,000 or more buying crypto. 5% have spent over € 10,000.
Watch: What is Bitcoin?
source https://collegeeducationnewsllc.com/young-brits-spend-student-loans-on-bitcoin-and-dogecoin/
No comments:
Post a Comment