Young investors drawn to cryptocurrencies
YOUNGER investors are more likely to be attracted to cryptocurrencies, according to new research.
A survey of UK investors conducted by Rathbone Investment Management found that 37 per cent of under 35-year olds were planning to invest in cryptocurrencies.
By contrast only four per cent of the over-45s were considering this type of investment.
“Lucrative returns made by the early adopters of Bitcoin and other cryptocurrencies have been widely publicised,” said Robert Szechenyi, investment director at Rathbones.
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“These early investors have been followed by others looking to make similar gains.
“Younger investors who perhaps have shorter investment goals have been more susceptible to the ‘Bitcoin craze’, whilst older generations with their mind on retirement savings have mostly stayed clear of what is a high-risk asset class.”
Since the introduction of Bitcoin in 2009, cryptocurrencies have multiplied in number and popularity.
Investors have been attracted to the potential high returns that can be achieved, as well as the anonymity and protection that decentralised online currencies can provide.
Almost a third of high-net-worth investors have invested in cryptocurrencies and of those just over half plan to invest in cryptocurrencies again in the future.
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In addition, the research found that men were more likely to be attracted to cryptocurrencies than women.
“Buying cryptocurrencies can come back to bite you. The bursting of the Bitcoin bubble this year is a clear reminder of just how volatile these investments can be,” said Szechenyi.
“While it can be interesting to dabble in alternative asset classes such as cryptocurrencies, and the rewards can be there if you are lucky with timing, we would not advise them to be a core part of an investment portfolio, which should be diversified in order to spread risk.
“The due diligence given to cryptocurrencies is nowhere near as rigorous as it is to more traditional asset classes such as equities and the risk is correspondingly much greater.”
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