Young crypto investors are funding their investments through a ‘cocktail of debt,’ which includes credit cards, loans, student loans, and other lending methods, new research shows.
With cryptocurrencies like Bitcoin and Dogecoin hitting a peak of more than £64,000 and £0.70+ respectively, before both massively decreasing in value not long after, many investors are likely struggling with debt.
So, here’s everything you need to know about the impending crypto debt crisis and how it is starting to cripple most young investors.
Young People, Cryptocurrencies and Debt
Interactive Investor, the UK’s second largest direct-to-consumer investment platform, said a study of 1,000 adults aged between 18-29 found a fifth had invested in cryptocurrencies, and more than half had turned to debt to fund their investments, with 23% using a credit card, 17% using a student loan and 16% using another type of loan.
When asked to comment, Myron Jobson, a personal finance campaigner at Interactive Investor, said: “Young adults using credit cards, student loans and other forms of debt to invest [in cryptocurrencies] is a worrying trend. He continued: “We would never recommend using a credit card to fund investing.”
Interactive Investor also found almost half of Gen Z and late millennial investors were starting their first forays into investing via crypto. For instance, almost half of 18–to-29-year-old said their first investment was cryptocurrency.
How Can Bad Crypto Investments Damage Your Financial Health?
When asked to comment further, Jobson: “There is the possibility of damage to your credit score if repayments aren’t met which can seriously hinder your ability to get a mortgage and access other forms of credit in future. It simply isn’t worth it.”
Amazingly, despite the negative statistics, the UK’s financial watchdog found that adoption of crypto was massively escultating, despite the big risks. The Financial Conduct Authority estimated that 2.3 million adults now hold crypto assets, up from 1.9 million last year.
Furthermore, Sheldon Mills, the FCA’s executive Director for Consumers and Competition went even further and warned: “If consumers invest in these types of products, they should be prepared to lose all their money.”
In essence, some of the biggest financial names in the business have concluded that crypto investments can seriously damage your financial health if not handled correctly.
Trust the Debt Recovery Experts When it Comes to Crypto Debt
Established in 2009, our specialist private debt recovery team are experts in the field of debt recovery, be it crypto debt or otherwise. Ahead of an expected wave of crypto-related debt due to fluctuation in the market, we are expected to be recovering a substantial amount of debts ran up when buying crypto.
With over 75 years’ combined experience in the industry, if your debt is over £1,000, we can act almost immediately when it comes to recovering a debt of any size over the threshold.
That said, if you’re a business and are owed money and want to get it back, take decisive action and instruct Cobra today on 0151 526 4222.
You can also email us at firstname.lastname@example.org.