Survey: more than 60% of retail investors used borrowed funds to buy cryptocurrencies
Credit cards and overdrafts have become the most popular way to raise funds
30.05.2022 - 08:50
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What’s new? More than two-thirds of the investors surveyed borrowed money to buy cryptocurrencies. 64% of crypto investors used one or more loans to get the amount they needed. This is evidenced by data from an online survey of 2000 people conducted in autumn 2021 by KIS Finance.
The full version of the KIS Finance research
What other data does the report contain? Young people aged 18 to 24 were the most active borrowers. Among this category, 70% of those surveyed used loans. Investors aged 35-44 years (68,9%) came in second place, followed by those aged 25-34 years (64%). Credit cards (35,5%), overdrafts (19,3%), as well as personal loans (14,6%) were used most often to raise funds.
KIS Finance Managing Director Holly Andrews stressed that a number of credit card issuers will view such loans as cash advances, which means a higher interest rate and additional fees. Andrews urged investors to invest in cryptocurrencies only the amount of money they can lose, and it should be funded by income and savings, not loans.
What events happened before? On May 10, traders lost more than $1 billion due to the collapse of the bitcoin price. According to Coinglass, a total of almost 287 000 traders’ positions were liquidated. The largest order was forcibly closed on the BitMEX exchange ($6,3 million) in the XBT/USD pair.
In May, Real Vision CEO predicted recession and massive liquidations in the crypto market in the coming month. He compared the current level of panic to the March 2020 crash and said the drop in global market demand was because of the US Federal Reserve System’s (Fed) tighter monetary policy.
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