Only 21% of UK crypto investors had a ‘excellent’ understanding of the industry prior to investing.
Huge price increases, encouragement from others, and the fear of missing out were all motivating factors for investors.
Crypto investors have grown in popularity over the last five years all across the world. During that time, one in every eight UK adults purchased at least one cryptocurrency. According to behavioral finance experts at the Oxford Risk organization, this is the case. Surprisingly, 36% of these investors had no prior knowledge of the crypto market when they bought in.
Furthermore, around a quarter of investors’ knowledge of cryptocurrencies remains unaltered after purchasing and retaining them. Only 21% claimed to have a “good” understanding of the crypto market prior to investing. This proportion dropped to just 33% for individuals who learned more about the industry after investing.
Greg B Davies, Head of Oxford Risk, stated, “The fear is that too many individuals are buying blindly without understanding what they’re doing, and are being pushed to invest by rising prices and other people encouraging them to try…” It’s concerning if people have large sums of money invested in cryptos and have no idea what they’ve purchased.
Wave of Cryptocurrency Investing
Thousands of cryptocurrencies have appeared in the last decade, with many of them failing. Only a few, though, continue to dominate the crypto world in terms of market capitalization and popularity. Bitcoin, Ethereum, Tether, Binance Coin, and Cardano are examples.
Many people were interested in cryptocurrencies as a result of massive price increases, anticipating that their financial situation would improve overnight. Fear of missing out (FOMO) on financial and technical advancements also fuelled these behaviors.
Massive price swings, on the other hand, have shattered the crypto community. In April of this year, Bitcoin, for example, reached an all-time high of $65,000. However, after Elon Musk’s ‘trolling’ and the Chinese crypto crackdown, Bitcoin dropped to $30,000 in less than a month. Similarly, Ethereum, the second-largest cryptocurrency by market capitalization, has lost half of its value, falling from $4,000 to under $2,000 today.
The FBI’s recovery of a Bitcoin ransom further depressed cryptocurrency values. Chinese rules have become even harsher, prohibiting crypto mining in order to prevent civil unrest and financial risk. Competition for the central bank’s digital yuan would be reduced as a result of the guidelines.
Negative Bitcoin and Ethereum analytics have recently prompted Chinese miners to sell their mining equipment on the secondary market. Last year, the country was the world’s greatest Bitcoin producer (65 percent), so the turnaround is significant.
Consider the Bigger Picture
According to the Oxford Risk Survey, a third of UK investors have given up on future cryptocurrency price increases. However, a quarter of them remain optimistic, while the other half are pessimistic.
According to the Ziglu fintech startup, 5% of investors have invested more than GBP10,000 (the highest capital tier) on little amounts to’see what happens.’ A quarter of the participants put in less than GBP100, and half spent less than GBP500.
In addition, one out of every five persons plans to join the bitcoin community or expand their cryptocurrency holdings in the coming year.
UK Cryptocurrency/n
