Almost half of UK residents aged 18 to 29 have made their first investment in digital assets, but more than 50% have used borrowed money to do so, according to the survey.
The survey for private equity platform Interactive Investor was conducted by Opinium in June 2021. The survey involved 1,000 respondents between the ages of 18 and 29. Digital currencies were split into three categories: bitcoin, Dogecoin and "other crypto-assets".
45% of young people chose cryptocurrencies for their first investment. This is almost double the share of those who invested through funds (23%) and significantly higher than investment trusts (13%). For 18%, public company shares were the choice.
Bitcoin proved to be the undisputed leader in popularity among digital assets, with a fifth of respondents having ever invested in it.
Half turned to debt finance to do so, with 23% using a credit card, 17% using a student loan and 16% indicating another type of credit.
"Young people using credit cards, student loans and other forms of debt to invest is a worrying trend," said Myron Jobson of Interactive Investor.
He noted that by investing in risky assets such as cryptocurrencies, young people are putting themselves at risk of defaulting on their debts. This can damage credit ratings and make it seriously difficult to get a mortgage or other types of credit in the future, Jobson stressed.
However, at the 10-year planning horizon, 20% of respondents said they would prefer to keep their savings in fiat money. Cryptocurrencies came second on this list, chosen by 16% of survey participants. Stocks of public companies rounded out the top three with a share of 14%.
Recall that the Financial Conduct Authority (FCA) counted 2.3 million cryptocurrency investors in the country. This number has increased by 400,000 over the year.