Crypto assets: fears that investors are taking too many risks

[Dari-phil44]

More people invest or buy crypto assets they are less likely to think they are taking a gamble.
A research by the financial conduct authority (FCA) that crypto investors risk losing the lot. Also some 14% of crypto buyers had borrowed to invest, buoyed by reports of big gains, a statistic as "simply terrifying". The eye catching swings in price of these crypto have drawn in scores of investors and led to a swathe of marketing.
Nearly half of investors (47%) last year considered their stake in crypto assets as a gamble, that proportion had now dropped by (9%) to (38%). The (FCA) say, the reason for this is as a result of their investments not covered by the usual safety nets as they were unregulated assets as a result they are at risk of losing all their investments.
BBCNews.com

[jackg]

It might depend on how they have invested though. If the people answering the serveys are confident in their investments then they might be up and have pulled their original investment out (then it wouldn't really be a gamble).

Lending to invest is quite a bad idea but if you've leveraged different types of investments then it's probably fine - especially at low interest (you can get mortgages about the rate of inflation now - and if the worst happens you can often get planning permission to split houses up and rent out individual flats - but it's likely not worth that hassle).

[Daniel91]

It all depends on the investment plans that each of us has, what kind of investment portfolio we want to have, and the exit strategy.
Of course every investment is a risk, but that is why it is essential to make a diversification and not invest only in one type of financial asset, since this reduces the risk of investing.
Initially, I exclusively collected bitcoin on this forum through various paid projects, then I switched to altcoins and lately I have been investing in business start-ups.
Realistically, it is enough for only 1 of these projects to pay off and I have achieved my financial goal.

[The Cryptovator]

It's all about small investors like us. Crypto investment isn't gable for institutional investors. We know that many institutional investors already entered the crypto market, they realized the potential of cryptocurrencies like Bitcoin. I know invest in cryptocurrency is a high risk, but all investors thought aren't the same. For me, I don't support borrowing money for cryptocurrency investment. Because it's risky to .e. We should invest what we can afford.

[Timeaftertime]

Crypto assets are to 2021 what .com companies were to the late 90's. People think they've got nothing to lose because they've seen the prices only go up. This then follow into the 'greater fool' theory, where people buy as the price goes up because they expect it to go up further. It's not the case ith Bitcoin, because it's proven itself as a store of value over time but most of these alt coins are non other than late 80's pump and dump schemes rehashed for the new generation.

[Taskford]

More people invest or buy crypto assets they are less likely to think they are taking a gamble.
A research by the financial conduct authority (FCA) that crypto investors risk losing the lot. Also some 14% of crypto buyers had borrowed to invest, buoyed by reports of big gains, a statistic as "simply terrifying". The eye catching swings in price of these crypto have drawn in scores of investors and led to a swathe of marketing.
Nearly half of investors (47%) last year considered their stake in crypto assets as a gamble, that proportion had now dropped by (9%) to (38%). The (FCA) say, the reason for this is as a result of their investments not covered by the usual safety nets as they were unregulated assets as a result they are at risk of losing all their investments.
BBCNews.com

Because some of the investors think always about the profit, they just put some money on crypto and count already their potential profits without knowing how big the risk they taking and how their investment will gone if they didn't know what they are into. That's why for new investors they should learn the possible risk so that they learn to set their risk management skills before taking into learnings about taking possible profits or how they can execute good trades in certain types of market condition.

[suzanne5223]

More people invest or buy crypto assets they are less likely to think they are taking a gamble.

reasonably fact life itself is a gamble and everything we also in every day cause tomorrow are not promise, the food we eat is also a gamble because we don't know how healthy they were planted but we still choose to eat it.
Meanwhile, crypto assets investment is gambling can still be win if the investors seek knowledge about the system first.

A research by the financial conduct authority (FCA) that crypto investors risk losing the lot. Also some 14% of crypto buyers had borrowed to invest, buoyed by reports of big gains, a statistic as "simply terrifying".

You cant rely on what the FCA is saying because they don't understand the basics of crypto investment but they only focus on the volatile feature of the market. However, the investors that borrowed money so they can invest in crypto are greedy investors and the crypto investors are advised to invest the amount they can afford to lose not to borrow money.

[passwordnow]

Also some 14% of crypto buyers had borrowed to invest, buoyed by reports of big gains, a statistic as "simply terrifying".

Those people should blame themselves for doing that action that's really not suggested of borrowing money to invest in a highly volatile asset. They know that for sure but probably they've been into FOMO and did that last thing that they shouldn't as they've got no choice and thought that they might be too late to enter. We saw how many of those folks did commit this on the 2017 bull run and then regrets when 2018 has entered. Investing in crypto is a high risk and high reward market but you must know what you do before investing.

[Darker45]

I guess it has to be clearly spelled out that although Bitcoin is a cryptocurrency, cryptocurrency is not Bitcoin. Lest it be misunderstood. For example, the figures might drastically change if cryptocurrency is replaced with Bitcoin. Therefore it needs a bit of qualification. I guess the investors' perception of risk is much lower in Bitcoin as compared to altcoins. If only it were not lumped together, which I think is the right thing to do, the 47% could be further interpreted as 60% if the assets are altcoins and merely 10% if the crypto asset referred to is Bitcoin.

However, the numbers could have reflected more on the level of understanding of the investor than the actual risk. Somebody who thoroughly understands Bitcoin and its potentials could say a straight no if asked whether Bitcoin investment is considered a gamble. But to one who has only encountered Bitcoin merely as a novel investment opportunity, he/she could assign more risks to it.

[mk4]

There is really nothing wrong with taking high risk investments all the time. The problem only comes when people think that their investments are actually guaranteed to succeed, even though there literally is no "guaranteed" investments whether it'd be in cryptocurrencies or in stocks, or even in business. Take a look at VCs, they invest in startups that literally have zero revenues. It's just really that you need to be aware of the risks you're taking.

[Poker Player]

I think we can call two types of crypto investors gamblers:

1) Those who have little knowledge and buy a coin in the hope that it will go up a lot because they have seen it on a blog/forum/YouTube etc.

2) Those who have enough knowledge of what they are investing in (for example in a fancy shitcoin) but know that it is a risky investment, which can give them a very high return, but that they also have a high risk of losing money.

2) are smarter than 1). It is not uncommon for investors with well diversified portfolios to allocate about 5% in high-risk investments.

Regarding borrow to invest. In principle for most retail investors it seems to me a bad idea because in general they will do it with little knowledge and with a high debt ratio. But there are many companies that invest with a good debt to equity ratio and with a good cash flow to repay the debt, so I would not rule out borrow to invest in 100% of the cases.