Interactive Investor

Cocktail of debt fuelling crypto-boom among the young

7th July 2021 09:07

by Jemma Jackson from interactive investor

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Almost half of young investors get their first taste of investing through high-risk cryptocurrency, interactive investor research finds.

Young crypto invetor 600 x400
  • 45% of young investors aged 18 to 29 say their first investment was in cryptocurrency.
  • Young favour cash, then crypto, on a 10-year horizon.

Almost half (45%) of young investors are getting their first taste of investing through high-risk cryptocurrency.

An alarming number are funding this through a cocktail of credit cards, student loans, and other loans, according to new research by interactive investor, the UK’s second-largest direct-to-consumer investment platform.

The poll of 1,000 UK adults, aged 18 to 29, was conducted by Opinium for interactive investor between 21 and 25 June 2021. Cryptocurrency exposure was broken down by bitcoin, Dogecoin and ‘other crypto assets’.

Bitcoin was far and away the most popular cryptocurrency. A fifth of all 18 to 29-year-olds said they had invested in bitcoin at some point, with half of these turning to debt to fund it: 23% used a credit card, 17% used a student loan and 16% used another type of loan.

Meanwhile, 27% of respondents admitted to using their credit card to invest in Dogecoin, 17% said they used their student loan and 12% cited another type of loan.

Myron Jobson, Personal Finance Campaigner, interactive investor, says: “Unfortunately, the risks and volatility of cryptocurrencies aren’t always laid bare, and the worry is if young investors get their fingers burned, it can put them off investing altogether and miss out on a golden opportunity to help build their wealth through sensible, long-term investing.

“Young adults using credit cards, student loans and other forms of debt to invest is a worrying trend. We would never recommend using a credit card to fund investing.

“And there is the possibility of damage to your credit score if repayments aren’t met, which can seriously hinder your ability to get a mortgage and access other forms of credit in future. It simply isn’t worth it.”

Entering the mainstream?

The research suggests cryptocurrency has entered the mainstream for young investors, leaving traditional assets in its wake. Almost half (45%) of 18 to 29-year-old investors had their first taste of investing via crypto. That’s more than twice the number who had first invested via funds (23%) and way ahead of investment trusts (13%). Almost one in five (18%) of respondents said their maiden investment was in listed company shares.

Mind the risk gap

Even so, many young people are completely risk-averse, and with a 10-year horizon in mind, cash was considered the best home for the biggest chunk of savings (20%) followed by cryptocurrency (16%), shares (14%), funds (11%) and investment trusts (8%).

Myron Jobson continues: “While half of young investors seem to have had their heads turned by crypto, the other half seem fixated on cash. None of us know what the future holds for cryptocurrency. But we do know that traditional assets have been serving investors for decades, they are far easier to understand, and they spread your risk.”

Tips for beginner investors

Interactive investor has a Knowledge Centre for beginner investors:

interactive investor recommends six carefully selected Quick Start Funds for beginner investors:


BMO Sustainable Universal MAP Cautious. The lowest risk of the three BMO funds. It targetsan annualised return of 2% above inflation over five years and can hold as little as 20% and as much as 60% in equities.

BMO Sustainable Universal MAP Balanced. The medium-risk option.The fund targets an annualised return of 3% above inflation over five years.  The fund can hold as little as 30% and as much as 70% in equities.

BMO Sustainable Universal MAP Growth. The most adventurous, higher risk of the three but with potential for higher gains. The fund targets an annualised return of 4% above inflation over five years and can hold as little as 40% and as much as 80% in equities.

Bear in mind that each target for the funds is just a target and not guaranteed.


Notes to editors
Opinium conducted research on behalf of interactive investor in an omnibus survey to 1,000 adults aged 18-29 carried out between 21 and 25 June 2021.

These articles are provided for information purposes only.  Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties.  The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.

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