By Julien Ponthus
LONDON (Reuters) – Young British investors are twice as likely to buy cryptocurrencies such as bitcoin as they are to buy stocks, a survey by U.S. financial group Charles Schwab indicated on Thursday.
In the survey, 51% of investors aged between 18 and 37 traded or owned cryptocurrencies, double the number of those – 25% – buying or holding equities.
Exposing the gap in generations when it comes to investing, a mere 8% of investors aged over 55 aged trade cryptocurrencies.
Bitcoin, the biggest cryptocurrency by market capitalisation, hit a record of almost $65,000 last week but has pulled back more than 16% since.
Despite the recent pullback, bitcoin has gained nearly 90% this year as large investors, banks from Goldman Sachs to Morgan Stanley and household name companies such as Tesla Inc warm to the emerging asset.
The spike in interest in cryptocurrencies has come amid a surge in online trading by retail investors, many of them younger people stuck at home with extra cash because of the COVID-19 pandemic.
The same trend has spurred a boom in usage of online trading apps such as Robinhood, and also fuelled the social-media driven rally in GameStop Corp stock that pitted retail investors against hedge funds earlier this year.
“As more young people purchase speculative products, there is a fear that these investors are not diversifying their portfolios enough to mitigate risks in case cryptocurrency markets decline,” read the Charles Schwab press release presenting the survey.
Its finding showed seven out of 10 young investors were uncertain as to how to build protections against losses in the current financial environment.
The survey was conducted between February and March 2021 among 1,000 UK investors aged over 18 and holding at least one type of investment.
(Reporting by Julien Ponthus and Tom Wilson; Editing by Alex Richardson)
