Cryptocurrency traders — according to the findings of a new written report commissioned by the United Kingdom's Fiscal Deport Authorization — are a immature, diverse bunch who are non always level-headed in their investment choices.

The study, conducted by the international strategy consulting firm BritainThinks betwixt mid-August 2020 and tardily January, was based on a sample of 517 "self-directed investors" — i.eastward., those who make investment decisions on their ain behalf and don't seek professional person financial communication.

The findings indicate that 38% of those surveyed don't have a functional reason for their investment choices, giving priority instead to emotional factors such as the thrill of trading and enjoying a sense of ownership in the companies they invest in, which sustains a perceived social condition.

Challenge, competition and novelty, for these investors, eclipse more sober, long-term motivations, such as putting their cash holdings to more efficient, gainful ends. While most respondents claimed they had high confidence and sufficient noesis about their field of investment, many reportedly lacked awareness of or belief in the risks they are courting.

Over 40% didn't view "losing some coin" as a potential risk of investing, and a vast majority (78%) agreed with the statement "I trust my instincts to tell me when it's time to buy and to sell." 78% likewise agreed that "There are certain investment types, sectors or companies I consider a 'condom bet.'"

Moreover, this investor cohort was found to exist more ethnically diverse and younger, as well every bit more likely to exist female, than conventional investors. The report attributes this to the greater accessibility offered past new investment apps, in addition to ads on social media and YouTube, which many respondents rely upon for tips and investment news.

Coupled with this thirst for novelty and investment challenges, however, is these investors' relative disability to financially weather potential investment losses. 59% of respondents with less than three years of investment experience would detect their lifestyles fundamentally impacted by a significant loss. Commenting on the study's findings, the FCA's executive director of consumer and competition, Sheldon Mills, said:

"Nosotros are worried that some investors are being tempted — oft through online adverts or high-pressure sales tactics — into buying higher-adventure products that are very unlikely to be suitable for them."

"Investors need to be mindful of their overall adventure appetite, diversifying their investments and only investing money they can afford to lose in loftier take a chance products," he added.

Parallel to the study'due south publication, the FCA is on Tuesday launching a digital campaign to discourage investment harm, with a series of pointed questions intended to prompt traders to suspension to reflect before taking the plunge.