Cryptocurrencies are unarguably an attractive investment asset class for millennials and the younger generation. However, a new survey of 1000 UK adults, aged 18 to 29 has further revealed just how much young investors believe in cryptocurrencies.
According to a survey published this week by investment platform Interactive Investor, roughly 45% of young investors in the UK already own cryptocurrency, with these digital assets representing their first form of investment. Their natural belief is that cryptocurrencies (although more volatile) offer greater yields when compared to traditional assets.
The young ones are more than willing to put their money where their mouth is with up to 23% of investors admitting that they used credit card debt to fund their bitcoin purchases. Similarly, 17% used student loans, while 16% used other different loans.
Aside from Bitcoin, 27% of respondents said they had used credit card loans to buy Dogecoin while 17% and 12% said they used student loans and other different loans, respectively.
Myron Jobson, Personal Finance Campaigner at Interactive Investor, referred to “young adults using credit cards, student loans and other forms of debt to invest” as a worrying trend, arguing that such investments might end up harming their credit scores if not successful.
He further stated that while no one knows what the future holds for cryptocurrency, "traditional assets have been serving investors for decades" and are more useful as portfolio diversifiers.
On the bright side, the survey further revealed that most of the investors are also maintaining a long-term perspective regarding their investments.
When quizzed on how they’d prefer to store their wealth over the next ten years, 20% of respondents chose cash, while 16% said they’d prefer leaving the money in crypto. Stocks came in third place on the rankings as the preferred option for 14% of respondents.
In a similar survey in May by the Financial Conduct Authority (FCA), the regulator found that the increased popularity of trading and investment apps has fueled the appetite of young investors for riskier assets like cryptocurrencies.