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Forex and crypto investors seek thrills and social status, says FCA study

A new study commissioned by the United Kingdom’s Financial Conduct Authority found that the profile of cryptocurrency traders skews towards thrill-seeking, trading on gut “instinct.”
Cryptocurrency traders — according to the findings of a new study commissioned by the United Kingdom’s Financial Conduct Authority — are a young and diverse bunch who are not always level-headed in their investment choices.The study, conducted by the international strategy consultancy BritainThinks between mid-August 2020 and late January 2021, was based on a sample of 517 “self-directed investors” i.e. those who make investment decisions on their own behalf and don’t seek professional financial advice.The findings indicate that 38% of those surveyed don’t have a functional reason for their investment choices, giving priority instead to emotional factors such as the thrill of trading and enjoying a sense of ownership towards the companies they invest in, which sustains a perceived social status. Challenge, competition and novelty, for these investors, eclipse more sober, long-term motivations, such as putting their cash holdings to more efficient and gainful ends. While most respondents claimed they had high confidence and sufficient knowledge about their field of investment, many reportedly lacked awareness or belief in the risks they are courting. Over 40% didn’t view “losing some money” as a potential risk of investing, and a vast majority of 78% agreed with the statement “I trust my instincts to tell me when it’s time to buy and to sell.” 78% also agreed that “there are certain investment types, sectors or companies I consider a ‘safe bet.’”Moreover, this …
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