UK Crypto Investors’ Lack of Knowledge Is “Very Concerning” as Just 5% Make “Financial Gains”

  • A recent study found that most cryptocurrency investors in the UK put their money on the line without understanding cryptocurrencies.
  • Potentially as a result, only 5% of the UK's crypto investor managed to turn a profit.

A study conducted by IW Capital, a Mayfair-based SME investment house, recently found that most cryptocurrency investors in the United Kingdom (UK) don’t thoroughly understand what they’re investing in, leading to losses – something the firm’s CEO said is “very concerning.”

According to the research, shared with Express, 38% of the UK’s crypto investors don’t “understand” cryptocurrency, and a third believe a supposed bitcoin bubble is going to burst in the near future.

Per the study, 7% of the 2,007 nationally representative sample revealed they believe cryptocurrencies are a more valuable investment than traditional financial products like stocks. Notably, only 5% of those who invested in cryptos made financial gains, a figure likely skewed by investors who “don’t understand” cryptocurrencies.

IW Capital’s report reads:

The data reveals that, fundamentally, Brits do not have enough information or knowledge on the topic of cryptocurrency. In fact, many have no knowledge about the subject whatsoever.

IW Capital

Despite a seemingly widespread lack of knowledge regarding cryptocurrencies, the survey further found that most of those who invested without understanding cryptocurrencies or the technology behind them did so without consulting a financial advisor.

Notably, Express’ report reads that only 5% of those who invested took advice from a financial advisor. Adding to this that most cryptocurrency investors joined the ecosystem in late 2017, when most cryptocurrencies were at their all-time high, the small percentage of investors who turned a profit shouldn’t be surprising.

Nevertheless, IW Capital’s chief financial officer Luke Davis noted the results are “very concerning.” He said:

It is shocking, but not surprising, to see so much confusion around the topic of cryptocurrency. I do not believe this is a reflection of UK investors’ risk profile, as a positive appetite for alternative finance remains, but to see that investments have been made without proper financial advice and a lack of facts and education is very concerning.

Luke Davis

IW Capital’s study comes at a time in which a Wells Fargo poll revealed only 1% of US investors plan on buying bitcoin, the flagship cryptocurrency. Since its near $20,000 all-time high, BTC dropped to little under $6,000 before bouncing back to its current price of $8,190.

The market’s sentiment is seemingly bullish, as cryptocurrency-focused investment firm Pantera Capital recently noted it sees bitcoin hit $67,500 by the end of 2019. Via a blog post, the firm revealed that Pantera Bitcoin Fund generated a return of over 10,000% over the past five years.

Crypto Exchange Huobi to Launch Fiat-to-Crypto Gateway in Turkey

Popular cryptocurrency exchange Huobi has announced it’s set to open a gateway that’ll allow Turkey’s residents to buy cryptocurrencies using the lira (TRY), the country’s fiat currency.

According to the exchange’s announcement, the fiat gateway will be open by the end of this year, and will start off with a TRY/USDT trading pair, which means users will be able to buy the stablecoin right after depositing fiat currency.

The stablecoin can then be used to buy other cryptocurrencies using the trading pairs supported on Huobi Global, the group’s trading platform for international users. Huobi is offering Turkish users a 50% discount on transaction fees, which can drop to 0.07% if users hold its Huobi Token (HT).

Livio Weng, the CEO of Huobi Global, stated:

Turkey is an important region for us, and we plan to bring Huobi's six years of industry expertise, advanced ecosystem, and a standard of trust to the market, and trigger key conversations around long overdue for a thriving crypto community.

The announcement notes that Turkey has over the years evolved into a “thriving crypto-friendly nation and a theater of commerce for exchanges and blockchain businesses.” The Turkish government has announced plans to create a national blockchain infrastructure, to aid in the deployment of this type of technology.

It adds that 20% of Turkey’s residents own cryptocurrency, presumably citing data from a survey conducted by German data firm Statista, conducted earlier this year. The study found 20% of Turkish respondents owned cryptocurrency, compared to 101% in China and 5% in the United States and United Kingdom.

Notably, only 3% of the survey’s respondents owned cryptocurrency in Japan, a country that has been accepting bitcoin as legal tender since April of 2017.

Featured image by Daniil Vnoutchkov on Unsplash.