6 out of 10 Bitcoin investors don’t have an ISA, and half don’t have a pension

Laith Khalaf
9 February 2021

New consumer research conducted by findoutnow on behalf of AJ Bell* suggests:

•    58% of crypto investors in the UK don’t have an ISA
•    Less than half have a pension
•    A quarter don’t have any traditional savings or investments
•    Only 1 in 5 crypto investors would be willing to lose their entire investment
•    30% wouldn’t be willing to lose any of their investment in cryptocurrencies
•    Last month the FCA warned that investors in cryptoassets should be willing to lose ALL their money
•    Tesla’s risk warning on Bitcoin

* survey of 1134 cryptocurrency holders on 20 Jan 2021

Laith Khalaf, financial analyst at AJ Bell, comments:

“Our research suggests that a generation of investors have leap-frogged traditional savings and investments and jumped straight into the deep end by buying cryptocurrencies. If you’re the world’s richest man, investing $1.5 billion of the assets of your electric car company into Bitcoin is one thing. But UK consumers seem to be playing Russian roulette with their money on the cryptocurrency markets.

“There are a number of concerning findings from our research. Not only are many consumers buying cryptocurrencies without having an ISA, pension, or savings account in place, there also seems to be a significant misunderstanding of the risks involved. 30% of cryptocurrency investors are not willing to lose any of the money they’ve invested, which suggests they lack an appreciation of the potential downside of their investment.  

“Only one in four cryptocurrency investors would be willing to lose 75% or more of their investment, which is not beyond the bounds of possibility, given the volatility of the asset class. Indeed, in January the FCA warned consumers that they should be willing to lose all of their money if investing in cryptoassets.

“The unpredictability of the future of cryptocurrencies means putting money into Bitcoin is more speculation than investment. In ten years’ time, it’s possible the price of Bitcoin will be significantly higher than it is now, it’s also possible it will be close to worthless. It’s such a new and evolving market that no one can predict with any confidence which one of these scenarios, or any in between, might prevail. 

“The same is not true of investing in the stock market. While there are no guarantees, there’s a very good chance that over ten years you will make a positive return from an investment in the stock market. For novice investors, a simple, low cost tracker fund, purchased in an ISA, will likely fit the bill. Investing is about gradually building up a nest egg, rather than getting rich quick. If you’ve never been tempted to trade movements in traditional currencies like US dollars, Japanese Yen, or the Argentine Peso, you should question what has led you to consider investing in a digital currency which is much more volatile.

“Our research suggests there are some investors who are buying cryptocurrencies in a sensible manner - on top of a diversified portfolio, and with their eyes wide open to the potential losses. But these measured crypto investors seem to be the exception rather than the rule. While no one can doubt Elon Musk’s exceptional record of achievements, Tesla’s purchase of $1.5 billion of Bitcoin isn’t a strategy private investors should follow without stopping to consider the downside. Indeed, in their latest regulatory filing, Tesla take care to outline many of the risks of buying cryptocurrencies. Mr Musk can afford to lose a few quid if things don’t go to plan, not everyone else is in the same boat.”

Excerpt from Tesla 10-K filing, 8th February 2021:

‘The prices of digital assets have been in the past and may continue to be highly volatile, including as a result of various associated risks and uncertainties. For example, the prevalence of such assets is a relatively recent trend, and their long-term adoption by investors, consumers and businesses is unpredictable. Moreover, their lack of a physical form, their reliance on technology for their creation, existence and transactional validation and their decentralization may subject their integrity to the threat of malicious attacks and technological obsolescence. Finally, the extent to which securities laws or other regulations apply or may apply in the future to such assets is unclear and may change in the future. If we hold digital assets and their values decrease relative to our purchase prices, our financial condition may be harmed.’

AJ Bell Consumer Survey Results

The survey of 1134 cryptocurrency investors was carried out by findoutnow on 20th January 2021.

A significant proportion of cryptocurrency investors don’t have the basic building blocks of a sound financial plan in place. 58% don’t have an ISA (cash or stocks and shares), 50% don’t have a savings account, and 53% don’t have a pension. 83% don’t have an investment portfolio and 23% have none of these savings or investments.

Do you have any of the following?







Savings accounts



Cash ISA



Stocks and shares ISA



General investment portfolio



Any of the above



Any ISA (cash or stocks and shares)



The survey revealed signs of a considerable misunderstanding amongst cryptocurrency investors about the potential downside of an investment in this area. 30% said they wouldn’t be willing to lose any of the money they invested. Only 25% said they would be willing to lose 75% or more.

How much of your investment in cryptocurrencies would you be willing to lose?









All of it


Prefer not to say


The most popular reason for buying cryptocurrency was to capitalise on digital trends, while 11% of consumers said they bought cryptocurrencies to make digital payments. Both of these are sound reasons for buying cryptocurrencies, provided it’s only a small amount of an otherwise diversified portfolio. However, 19% of consumers bought cryptocurrency on the back of rising prices, which suggests they are partly relying on past performance being repeated again – a heroic assumption.

Why did you buy cryptocurrency? (tick all that apply)

Low interest rates on cash


Past price performance is good


Stock market is too risky


Capitalise on digital trends


Make digital payments


Worried about inflation


Other reasons


Laith Khalaf
Head of Investment Analysis

Laith Khalaf started his career in 2001, after studying philosophy at Cambridge University. He’s worked in a variety of roles across pensions and investments, covering both the DIY and the advised sides of the business. In 2007, he began to focus on research and analysis, and has since become a leading industry commentator, as well as a regular contributor to the financial pages of the national press. He’s a frequent guest on TV and radio, and for several years provided daily business bulletins on LBC.

Contact details

Mobile: 07936 963 267
Email: laith.khalaf@ajbell.co.uk

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