Crypto: Am I one of the few or the many?

The surge in interest could be down to people’s pockets being fuller – prior to the cost of living crisis, of course – having been unable to travel or have meals out over the pandemic.

But even still, I haven’t been able to bring myself to buy a single one. Friends and acquaintances around me have put money into cryptoassets and recently, my husband even showed me a digital piece of art, which was an NFT, that his friend has poured all his money into.

When I hear these sorts of stories, I often find myself pondering if I’m going to be left behind. 

Am I mad to not even take the slightest risk in buying it? Because ultimately, isn’t that what investing is all about? Taking risks? 

So why can’t I bring myself to buy it?

Now given my patch as a journalist for a few years has been regulation, you could say it’s down to the fact that I know the Financial Conduct Authority’s constant outcry on this all too well: If you invest in crypto be prepared to lose all your money.

Thus it could be that I am, in fact, certainly not prepared to lose all my money. Or is it down to my risk-averse nature to always prefer to play it safe? 

This would be wise given cryptocurrency markets have recently been a bit rocky after the Terra Luna token fell from $118 (£96) to $0.09 last week.

I often find myself pondering if I’m going to be left behind.

Still, I can’t quite fathom which of the two it is or if it’s both, but I do know one thing holding me back for sure is looking at those family and relatives around me that invested in the traditional way – by that I mean in stocks and shares, bonds, Isas, property, gold and so forth – and they seem to have done pretty well.

So why would I turn to assets such as crypto and NFTs, which are naturally more risky given they aren’t regulated, for perhaps the same return? 

Now I know this will be a controversial opinion and some argue that the return is much higher with those riskier assets, and sooner too. And I’m sure that may even be correct in some cases. But what about in those cases that it isn’t, where is the plan B?

Crypto is making its way into the industry with the likes of companies such as Blackrock, UBS and Wisdom Tree all having come out in the press to be looking at ways to incorporate crypto investments for clients.

Last month, the chancellor Rishi Sunak asked The Royal Mint UK to create an NFT to be issued by the summer.

In a tweet by HM Treasury it said: “This decision shows the forward-looking approach we are determined to take towards cryptoassets in the UK.”

Now of course, it does provide some security to know that if more companies begin to do it, the regulator will eventually, I assume, have to regulate it, which will make it somewhat safer. And the fact that the government is also joining the conversation does leave me a bit concerned about whether I’ve left it too late already.

Yet I just can’t do it. I can’t buy into something that has just sort of appeared, something the regulator as recently as last week put out warnings for.

Having seen some recent social media posts regarding the investments, the FCA said although it could not comment on individual products, investors should be aware that the regulator does not have regulatory oversight over direct investments in cryptoassets and NFTs.

I can’t buy into something that has just sort of appeared.

“There are no consumer protections for those who buy any cryptoassets and NFTs, and they are not FSCS protected. 

“As a result, if you buy cryptoassets you should be prepared to lose all the money you invest.”

Now when you see warnings like this from the regulator – perhaps the only people who could help you with your investment if something went wrong – I’m sure you can understand my resistance to buying these assets. 

So perhaps I’ll be wrong eventually, and I’m sure I’ll have a lot of ‘I told you so’s’ coming my way at that time because the joke really will be on me, but for now, I’ll stick with my gut and my traditional means of investing.

sonia.rach@ft.com

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