“The Risks of Cryptocurrency Investment Advice from Friends: Experts Warn of Dangers and Potential Losses”

Cryptocurrencies have been the way to enter the world of investment for many young people. A recent study shows that they have often done so motivated by the recommendations of friends. In this analysis, the experts warn that this has certain dangers, since when they tell their experiences, they skip the part where they lost money.

“People talk about the pros, but not the cons,” explains Lee Baker, financial planner and founder of Apex Financial Services in Atlanta. The report was produced by the Investor Education Foundation in conjunction with NORC at the University of Chicago. The documentation, collected by the CNBCreflects that last year31% of new cryptocurrency investors had been influenced by friends to buy assets.

While in the traditional bond and stock market, this same percentage is 8%. The contrast is a sign of “a social element in investing in cryptocurrencies which is not evident in investing in stocks or bonds”, according to the study. Gary Mottola, co-author of this study, points out that it is not bad to be advised by friends, but it can become a “double-edged sword”.

Experts also point out that many of these beginners have used cryptocurrencies to later enter the traditional stock market, something that yes it can produce good results, according to Mottola. “Friends or profiles on social networks that recommend the crypto world may not be trustworthy,” she concludes.

Many personalities, such as actress Lindsay Lohan and rapper Soulja Boy, have been sanctioned by the Securities and Exchange Commission for having sponsored these assets without having legitimate knowledge. These types of profiles have been branded as “pseudo-experts” by the founder of Apex Financial Services, Lee Baker.

“If you’re making blind decisions without doing any research, that’s a terrible idea.”

The fall of this market was brutal, from 2020 to 2021 Bitcoin went from being worth 10,000 to 68,000 dollars and, suddenly after reaching this record, it collapsed and investors lost around 2,000 million of dollars.

Baker points out that the main danger is being recommended by someone who does not know the risk and volatility of investments. As well as, receive advice at the peak of growth. “If you’re doing research on the world, I think that’s great,” Baker said. “If you’re blindly making decisions without doing any research, that’s a terrible idea.”