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.
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.
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.
