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'Thrill' and 'Status' Driving Young People to Crypto Investment, Says UK Financial Watchdog
These young investors "skew more towards being female, under 40 and from a BAME background," the regulator said.
Updated Sep 14, 2021, 12:30 p.m. Published Mar 23, 2021, 12:35 p.m.
New research from the U.K. Financial Conduct Authority (FCA) suggests the "thrill of investing" and "status from a sense of ownership" are driving more younger people to engage in "higher-risk" investments like cryptocurrency and foreign exchange (forex).
STORY CONTINUES BELOW
- The financial watchdog published its findings Tuesday, suggesting that those doing so come from a more diverse background than traditional investors.
- "They tend to skew more towards being female, under 40 and from a BAME background," the FCA said, referring to Black, Asian and minority ethnic, a U.K. demographic.
- They are also more reliant on YouTube and social media platforms for investment information and are likely to be using widely available investment apps.
- The research showed that some 59% of those investing in products like crypto admitted they may not have the means to withstand a significant financial loss.
- The FCA also found that over four in 10 do not view "losing some money" as a risk of investing, while 78% claim to rely on "gut instinct and rules of thumb" to know when to buy and sell.
- "The challenge, competition and novelty are more important than conventional, more functional reasons for investing like wanting to make their money work harder or save for their retirement," the FCA concluded.
- The regulator previously tried to tackle investment risk to retail customers by banning the sale of crypto derivatives in January.
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See also: EU Regulators Warn Again on Crypto Investment Risks
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Exchange Review - March 2025
CoinDesk Data's monthly Exchange Review captures the key developments within the cryptocurrency exchange market. The report includes analyses that relate to exchange volumes, crypto derivatives trading, market segmentation by fees, fiat trading, and more.
What to know:
Trading activity softened in March as market uncertainty grew amid escalating tariff tensions between the U.S. and global trading partners. Centralized exchanges recorded their lowest combined trading volume since October, declining 6.24% to $6.79tn. This marked the third consecutive monthly decline across both market segments, with spot trading volume falling 14.1% to $1.98tn and derivatives trading slipping 2.56% to $4.81tn.
- Trading Volumes Decline for Third Consecutive Month: Combined spot and derivatives trading volume on centralized exchanges fell by 6.24% to $6.79tn in March 2025, reaching the lowest level since October. Both spot and derivatives markets recorded their third consecutive monthly decline, falling 14.1% and 2.56% to $1.98tn and $4.81tn respectively.
- Institutional Crypto Trading Volume on CME Falls 23.5%: In March, total derivatives trading volume on the CME exchange fell by 23.5% to $175bn, the lowest monthly volume since October 2024. CME's market share among derivatives exchanges dropped from 4.63% to 3.64%, suggesting declining institutional interest amid current macroeconomic conditions.
- Bybit Spot Market Share Slides in March: Spot trading volume on Bybit fell by 52.1% to $81.1bn in March, coinciding with decreased trading activity following the hack of the exchange's cold wallets in February. Bybit's spot market share dropped from 7.35% to 4.10%, its lowest since July 2023.
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