Cryptocurrency losses
Also known as:
- crypto trading
- crypto exchange
- digital asset trading
- CFD trading
What is Risk ?
Digital risk factors associated with their interests and activities
Trading in cryptocurrencies has become very popular. Bitcoin’s value rose from £0.19 to £19,000 in ten years.
There are lots of ways to start trading cryptocurrency. You can buy it on an exchange site. All you need is identification and a way to pay.
Crypto trading sites allow you to:
- track the value of a cryptocurrency
- buy more of a cryptocurrency
- exchange cryptocurrencies
- cash out for traditional currency (like pound sterling)
Contract for difference (CFD) trading of crypto involves speculating on cryptocurrencies’ value. An investor might trade with a broker, by predicting whether a cryptocurrency will go up or down in value.
Many crypto exchanges and CFD trading sites have an 18 and over age policy. However, owning or trading cryptocurrency aged 17 or under is not against the law in the UK.
Where this can happen
Risks and motivations
Risks
Losing money
The value of cryptocurrencies can change, making any investment extremely high risk. Lack of regulation means there is little consumer protection when crypto loses value.
Gambling-like behaviours
Some exchange sites use gambling-like tools to encourage people to buy more. These might be first-time rewards or time-limited offers.
The risk-factor can be exciting. Young people can feel encouraged to spend more to win back losses.
Scamming
Crypto scams are used to trick people into investing and trading in cryptocurrency. Some young people may be very new to crypto trading. This might make them especially vulnerable.
Motivations
Young people can have an interest in emerging technologies. This can include blockchain, non-fungible tokens (NFTs), or crypto. Some of these are connected to online gaming. These can be motivating factors.
Crypto trading can also seem like a good way to make money. It offers financial independence and anonymity. Crypto trading may also be perceived as being relatively easy.
Young people may feel pressured into crypto investment and trading by peers. Similarly, influencers can make trading seem appealing, especially when they advertise their successes.
What you can do
Investing and trading in cryptocurrency comes with risks. You can help a young person to think about these by talking to them.
Discussions might include:
- the lack of regulation and consumer protections
- using established exchange platforms or sites
- how many trading sites are for ages 18 and over
- avoiding offers seen on social media or email
If you think that a young person is at risk, follow your safeguarding procedure and read our safeguarding guidance.
Support
Specialist organisations can offer specialist support in fraud, scams, and debt.
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