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

Digital Assets

Rockstar Co-Founder and All-star Line Up Join Advisory Board to Take Metacade into Post Beta Orbit

Metacade, the revolutionary Web3 gaming platform, prepares to streak out of beta with a slew of ground-breaking initiatives that will redefine the way blockchain games are developed.

Retail FX

Prop firm The Funded Trader shuts down, claims relaunch in April

Prop trading firm The Funded Trader has ceased all operations, with claims for a relaunch in the near future.

Digital Assets

Ethereum-Based Tokenized Real Estate Platform USP Launches On Republic

How This Californian Startup Is Revolutionizing Real Estate Investment through Ethereum-Based Tokenization.

Digital Assets

Sui Spikes in Weekly DEX Volume, Joins Top 10 of All Blockchains

March DEX volume on Sui stands at over $2.88B – up more than 49% from February – with decentralized exchange Cetus and wholesale liquidity layer DeepBook leading.

Digital Assets

Prisma Finance suffers $10 million crypto exploit, attack ongoing

Liquid staking protocol Prisma Finance fell victim to a security exploit on March 28, resulting in nearly $10 million in Prisma mkUSD and wrapped stETH being stolen by hackers.

Digital Assets

Masa and LayerZero: Bridging Blockchains for Data Sovereignty

Masa Network is poised to revolutionize the personal data landscape with its upcoming launch as a cross-chain platform, making it accessible on a variety of blockchains right from the start.

Digital Assets

Big Time Generates over $100M in Revenue since Preseason

Innovative game developer Big Time Studios announces that its highly anticipated free-to-play multiplayer action/MMO RPG Big Time, has generated $100M in revenue. According to the team, players transacted a total volume of over $230M, without selling a single token.

Digital Assets

Centralized exchanges are 10 times more popular than DEXs in Western Europe

Western European traders are found to prefer centralized exchanges over decentralized ones as CEX traffic outpaces DEXs by a factor of ten.

Market News

Stock Market Analysis: Is NVDA Losing Its Leadership?

Since the beginning of the week, the S&P 500 Index (US500) has seen a modest increase of about 0.58%, whereas NVDA’s share price has experienced a decline of approximately 3.8%. This recent divergence raises concerns among Nvidia stock investors — could it signify a loss of NVDA’s market leadership?

<