The Financial Conduct Authority has once again come up with interesting research, which indicates that a major chunk of the population includes investors who invest their money in cryptocurrency.
With the easily available guaranteed loans for unemployed, even unemployed individuals are driving towards the world of Cryptocurrency despite not knowing what it essentially is. After publishing a report, which inspected the perspective of Cryptocurrency investors, the FCA concluded that the majority of investors thought of buying Cryptocurrency as gambling which would allow them to fetch quick profits in no time.
According to the research, the investors were actually individuals who were simply influenced by influencers on the internet and friends. The influencers directly or indirectly spread the information that investing in Cryptocurrency can multiply wealth. In fact, the sole motivation behind investing in Cryptocurrency was the fact that taking high risks would fetch them more profits.
Not knowing how crazily fast these currencies fluctuate and the constantly hovering risk attached to them, many citizens started putting in their hard-earned money while having no security against the loss. The research by FCA portrays that a large percentage of UK Investors do not even realize what they are doing and are truly landing themselves in a mess.
Uncertainty? Not an Issue for Investors!
Authorities have also warned against the uncertainty of investing in cryptocurrencies, given the fact that there are numerous risks involved. Moreover, since people can and are taking guaranteed loans to invest in cryptocurrencies, this puts them at greater risk of falling into debt if they cannot repay the loan amount. However, with proper guidance from the lender, one can use these loans to make a calculated investment.
Both Sides of Cryptocurrency Investment Using Guaranteed Loans
Bitcoin is the most popular cryptocurrency in the market in the UK. In spite of the risk, people are drifting towards this unstructured and risk-laden investment with hopes that they will get rich instantly.
Research has also indicated that a majority of those who are drifting towards these loans are actually unemployed and want to have a steady flow of income. Another interesting fact that was discovered during the survey was that those who bought cryptocurrency spent less than two hundred pounds in order to stay in the safe zone.
Out of all these people, only a handful said that they would not invest in cryptocurrency in the future since they had incurred huge losses. Surprisingly, a majority of those who had not bought cryptocurrencies stated that they would be interested in investing in the future.
Additionally, over 70% of those who participated in the survey did not even understand what cryptocurrency fundamentally is. Since these investments are extremely volatile in nature, authorities have warned against the risks, which are involved.
In fact, these currencies are not even fully understood by financial experts and analysts because of their complexity. Even though the risks involved are rather threatening, the FCA has stated that only if there are not huge amounts of money involved, the harm due to losses would not be as much.
The Downside of the Trend
A considerable number of experts have shown their concern since the lack of structure in the crypto market ensures that when people do lose a considerable sum of money, they would not have a cushion of protection to fall back on.
Because of the lack of discipline and structure, investors could lose the entire sum of money that they have invested in cryptocurrency.
Another factor to be considered is that there are several risks involved. In fact, predators are always on the lookout for vulnerable victims. Hacking of accounts is a major concern related to cryptocurrencies. Furthermore, since this is not regulated, the investors could invest their illegally obtained money in order to make more profits without the authorities finding out.
But Winners Are There As Well…
The reality is that there are not over a handful of individuals who are making millions with cryptocurrencies. The numbers of individuals who have found riches are moderately low as contrasted with the total number of investors. Whoever is purchasing their cryptocurrency, are only buying it with expectations of selling at a benefit later on.
While taking the easily available and low-interest guaranteed loans for unemployed people tend to forget that these loans need to be paid back as well and that too in due time. The lack of understanding of cryptocurrencies is definitely something that could push investors in a deeper hole. So, before investing anywhere, one must ensure that he or she gathers knowledge about the subject beforehand. Such loans are there to assist the investors but it is important that you, as an investor, do your homework, and then make a cryptocurrency investment.