File this under res ipsa loquitur…although as one wag said, this news tidbit does seem to disprove the claim that young people aren’t risk takers. But it may establish that they are innumerate or more specifically, bad at statistics. One of Nassim Nicholas Taleb’s recommendations about investing boils down to “Be paranoid” and “Don’t be greedy” and leveraged cryptocurrency speculation is the opposite of that.
This sort of thing does not help the image of student borrowers, although it does strengthen the case for regulating cryptocurrencies far more strictly. Given the decline in the status of cab drivers, who historically have been indicators of market peaks (when cab drivers talk about their stocks, it’s usually sign of a bubble), this finding may also be a proof of Peak Cryptocurrency.
According to a study by The Student Loan Report, over one-fifth of current university students with student loan debt indicated that they used their student loan money to invest in digital currency such as bitcoin.
The student loan news and information website found that 21.2% of the 1,000 students they surveyed indicated that they used their borrowed cash to gamble on the highly volatile digital currency market. While school administrators may look down upon the practice of using borrowed funds for non-school expenses, Student Loan Report indicates that there are currently no rules against it. College students are able to use loans for “living expenses,” a flexible category that covers a wide range of potential necessities.
Given that 70% of retail investors in futures lose money, there’s not a strong reason for thinking that latecomers to the cryptocurrency party would be stellar traders. I wonder how many students who lose so much money on bad cryptocurrency wagers that it undermines their ability to finish their course of study (presumably they really did need at least some of that “living expense” money for bona fide living expenses) will be willing to ‘fess up to that fact.