The FCA has today published research into the motivations behind investing in cryptocurrencies. The findings show:
• Getting rich quick is one of the primary motivations behind investing in cryptocurrencies
• Fear of missing out (FOMO) also drives cryptocurrencies
• Many cryptocurrency investors don’t understand what they are buying
Laura Suter, personal finance analyst at investment platform AJ Bell, comments:
“This research shows that investors went into cryptocurrencies for all the wrong reasons, ticking off every single warning sign for investing. Many people said they bought cryptocurrencies without understanding them, because they wanted to ‘get rich quick’, and had seen lots of excitement on social media about them.
“The subsequent collapse in the price of bitcoin and other cryptocurrencies should serve as a warning signal for those getting into investing that you need to do your research before you put your hard-earned cash into something. Many people in the study said they bought cryptocurrencies because friends told them to or because a taxi driver told them it was a safe bet, but failed to do any research themselves.
“It’s a timely reminder that before you invest you should make sure you understand what you’re getting into, that you know the risk of what you’re buying and that you’re not just relying on hype and excitement from friends or social media. Investing is not a get rich quick scheme, it’s a way to build wealth slowly and with patience – and anything that instils a “fear or missing out” or requires you to invest before thinking is best to be avoided.”