Crypto investors claim to have better financial knowledge than they actually have, Portuguese survey shows

Maria Nikolova

Investors in ICOs and Bitcoins are more risk-taking than the average, a survey conducted by CMVM shows.

The profile of investors in crypto-assets appears to be different than that of other investors, according to preliminary findings from a survey conducted by the Portuguese Securities Market Commission (CMVM) between June 18 and August 6, 2018.

Thus, investors in crypto-assets (ICOs / Bitcoins) believe they have a better financial knowledge than they actually have. Typically, investors in ICOs / Bitcoins are younger, hold more shares and are more risk-taking. In particular, 47% of crypto investors are between 25 and 39 years old, and 62% admit to be risk-taking.

In terms of psychology, there is a somewhat worrying finding. More than half (63%) of investors in ICO / Bitcoins believe that they know enough about investments so that they do not need to consult a financial industry professional. This compares to 43% of the total sample of surveyed investors who believe so.

With regard to psychological biases, crypto investors often hold loss-making assets for too long in their portfolio. By contrast, the average investors are often prone to dispose of profit-making assets too swiftly.

Across the entire sample of surveyed investors, 36% say they are risk averse, 28% are neutral and 38% say they are risk taking.

When choosing a type of investment, 98% of the respondents consider whether they truly understand the characteristics of the product. The risk of loss of invested capital was a key factor for 95% of the respondents, and the clear knowledge of commissions and fees associated with the investment was mentioned as a factor by 89% of the respondents.

Let’s recall that, on November 3, 2017, CMVM issued a press release warning investors about the underlying risks of investment in ICOs. It drew attention to new financing models for business projects of a digital nature, most of which are not covered by the regulatory framework. This legal gap implies the non-existence of protection for investors, who face other risks, such as that of the loss of capital invested, high price volatility, the possible lack of liquidity, the lack of appropriate documentation for a complete understanding of the investment to be made, and, furthermore, the potential for fraud and/or money laundering involved in these offers. Concern over the risks of ICOs is equally prevalent among other European supervisors.

Read this next

Retail FX

ThinkMarkets expands CFDs lineup to over 4000 ETFs and shares

ThinkMarkets has expanded its service offering by incorporating 2500 new CFDs on shares and ETFs on its ThinkTrader platform.

Retail FX

France regulator warns investors of Omega Pro,

France’s financial markets regulator alerted investors that scams related to Omega Pro Ltd are beginning to circulate, with the blacklisted firm capitalizing on the situation to run a range of “unrealistic” offers.

Digital Assets

Web3 platform Grand Time paid $2 million in token earnings to date

Community-driven Web3 platform Grand Time said its offering – which includes a multifaceted platforms and its native token – has been gaining significant traction highlighted by impressive operational metrics.

Institutional FX

FX volumes at MOEX halved in April as ruble gains gorund

Currency trading at Moscow Exchange (MOEX) halted its upward route in April as monthly volumes nearly halved from a month earlier.

Digital Assets

FTX US adds stock trading, fractional shares to crypto platform

FTX US, the American subsidiary of crypto exchange FTX has kicked off stock trading feature to its customers in an effort to compete with popular platforms such as Robinhood and eToro.

Industry News

UK FCA empowered to remove brokers’ permissions in 28 days

Businesses with permissions they don’t need or use, risk misleading consumers. These new powers will enable us to take quicker action to cancel permissions that are not used or needed.

Industry News

CFTC charges $44m Ponzi scheme but millions may have fled to foreign crypto exchange

The CFTC alleged that defendants transferred millions of dollars to an off-shore entity that, in turn, may have transferred funds to a foreign cryptocurrency exchange. None of these funds were returned to the pool.


Saxo Bank deploys Adenza to address Basel and EBA requirements

The integration of ControllerView will enhance Basel-driven capital calculations and reporting at Saxo Bank in support of the bank’s multijurisdictional capital and liquidity reporting requirements throughout Denmark, Switzerland and UK, with plans to expand into the Netherlands.

Executive Moves

ComplySci appoints CTO, CPO, and CLO to further regtech’s product expansion

ComplySci offers compliance software used by more than 1400 global institutions to identify risk and address regulatory compliance challenges.