Major American financial group Charles Schwab conducted a study and found that young British investors are twice as likely to buy cryptocurrencies, such as bitcoin, than to buy shares. The company says it is closely monitoring the crypto space but needs “additional clarity from regulators” before considering offering crypto services directly to customers.
Charles Schwab’s crypto survey
US financial group Charles Schwab, which has approximately 31.9 million active brokerage accounts, revealed the results of its investment survey last week, Reuters reported.
The survey, conducted between February and March, received 1,000 responses. Respondents were UK investors over 18 years of age holding at least one type of investment from a list of assets, including stocks, bonds, certificates of deposit (CDs), exchange-traded funds (ETFs) and contracts for difference (CFDs).
Charles Schwab found that 51% of Millennium and Gen Z investors between the ages of 18 and 37 traded or owned cryptocurrencies, up from 44% in May last year. In addition, 70% consider cryptocurrencies a good investment. Meanwhile, only 8% of investors over the age of 55 traded cryptocurrencies. In comparison, 25% of young investors bought or owned shares.
Charles Schwab’s press release detailing the survey:
As more young people buy speculative products, there are fears that these investors will not diversify their portfolios enough to mitigate risks should cryptocurrencies markets fall.
The survey’s findings further showed that seven out of ten young investors were unsure how to protect themselves from losses in the current financial environment.
Richard Flynn, general manager of Charles Schwab UK, told Business Insider that the study provides insight into the risk young investors face. He said, “Cryptocurrencies seem to be the flavor of the month. It’s important to remember that these are speculative assets that don’t fit traditional asset allocation models. “
Flynn then warned, “While the expected returns are tempting, investors should be aware that it is just as sensitive to supply and demand but will not necessarily have the inherent value behind it.”
Walt Bettinger, CEO of Charles Schwab, spoke about cryptocurrency in his company update last week. He said his company is looking “closely” and “cautiously” at the crypto market and is waiting for regulators to provide more advice on the digital currencies before considering offering crypto capabilities on his platform.
Emphasizing that “additional clarity from regulators would be important before considering offering a retail-type trading experience on crypto,” he said:
We keep a close eye. We recognize well what is going on. We would like to see more clarity about the regulations. If and when that comes, you can expect Schwab to be a player in that space, just as it has been a player in other investment opportunities across the spectrum.
What do you think about this Charles Schwab survey and do you think the company should offer crypto services? Let us know in the comments below.
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