Dutch financial watchdog releases crypto report: youngsters taking too much risk

27 Jul, 2018
by Jelmer van der Dussen
News
Dutch financial watchdog releases crypto report: youngsters taking too much risk

The Dutch financial services watchdog Autoriteit Financiële Markten (AFM) has released a report on cryptocurrencies and crypto investors in the Netherlands. One of the conclusions of the survey among 855 crypto investors is that younger investors without any investing experience are taking bigger risks in the crypto space.

The AFM concludes that in general the Dutch are investing relatively safe. Only 1% of the investors would get in trouble financially in case of a big drop in the crypto market. Less than 2% of the survey participants invested in crypto with borrowed money.

The AFM is concerned about the younger investors in the market, because they lack the experience of investing and usually don't have a lot of money - of the money they have most is invested into cryptocurrencies. The report states that 'in general the Dutch are not very sensitive for the crypto goldrush, but young people are'. The AFM calls them 'unexperienced investors in a speculative and fraud-sensitive market'.

The AFM says it's is having a hard time reaching those young people with their warnings. Almost one third of the investors under 30 years old doesn't know anything about warnings issued by the AFM on the risks of investing in crypto. Above 50 years old, nine out of ten investors are aware of the AFM warnings.

The AFM states it will keep issuing warnings on the risks of cryptos and ICOs. 'Crypto markets continue to be plagued by deception, fraud and manipulation', the institution says.

580,000 investors
According to the AFM report, 580,000 people in Holland (17,2 million inhabitants) were invested in cryptocurrencies during the bull run of late 2017 and the start of 2018. At the start of this year the fear of missing out was real in the Netherlands, with over 80% buying cryptocurrencies on the recommendation of friends and family. In 2016 this was still 43%.

69% of the Dutch investors has invested less than €1000 in crypto and most of the late investors are in it to make a quick buck. Less than 10% has participated in an ICO. The average age of the Dutch crypto investor is 38 years old.

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