Londoners bitten by Bitcoin bug, but other Brits steer clear

30% of London investors are planning to invest in digital currencies in the near future compared to 13% nationwide, according to research by Rathbone Investment Management involving 1,503 Brits.

One in eight cryptocurrency investors in the capital attribute their current wealth to digital currencies like Bitcoin and Ethereum compared to just 4% in other parts of the UK. Despite this, more people have money saved in traditional investments such as cash ISAs and stocks and shares ISAs.

Rathbone Investment Director Robert Hughes-Penney says: “Lucrative returns made by the early adopters of Bitcoin and other cryptocurrencies have been widely publicised. These early investors have been followed by others looking to make similar gains.”

“These figures suggest there are a number of investors in London with shorter investment goals who have been more susceptible to the so-called Bitcoin craze, while outside of the capital investors have mostly stayed clear of what is a high-risk asset class.”

We just don’t get it

IW Capital recently released research, involving 2,007 respondents, exploring the UK’s attitudes to cryptocurrency as an investment opportunity opposed to traditional and alternative methods.

38% said that they do not understand cryptocurrency at all. A third of the UK believes that the bubble will burst, and 27% feel that Bitcoin et al are a less stable investment than SME investment. Only 7% believe cryptocurrency is more valuable than traditional stocks and shares investments, whilst 5% of those who have invested in cryptocurrency have made financial gains.

A fifth of Londoners believe that cryptocurrencies are more valuable than traditional investments, such as stocks and shares. This is higher than the North East (10%), South East (7%) and Yorkshire and Humberside (5%). The South East (29%), Scotland (27%) and the South West (24%) are the most conservative, sticking with the view that traditional investments still rule the roost.

Luke Davis, Founder, and CEO of IW Capital, says: “With so much advertising and airtime dedicated to cryptocurrencies, particularly over the past 12 months, it is shocking, but not surprising, to see so much confusion around the topic of cryptocurrency. To see that investments have been made without the proper financial advice and a lack of facts is very concerning. With so many high-profile celebrities and business people coming out and supporting cryptocurrency investments, I believe that we will continue to see confusion and a lack of information surrounding them.”

Whilst it is now more accessible to invest into currencies, with e-currency and e-trading platforms easily accessible via smartphones and tablets, there is a lack of information around other, more stable investments, such as SME investments, which can deliver a consistent return when advised upon by a qualified professional.

“Ambassadors have a responsibility to supply accurate and correct information to potential investments. Many treat cryptocurrency decisions like a bet in a bookmaker, rather than as a serious investment decision like it is,” argues Davis.

“There is a place for cryptocurrency investment, but there are so many other investment opportunities that are not taken advantage of. My major concern within cryptocurrency investment is the lack of transparency in the investment. There are so many great SME-based investments that have superb tax incentives to build a portfolio upon, but they are undersold against the allure of Bitcoin and other cryptocurrencies as a viable investment for the first-time investor,” he concludes.