As interest in cryptocurrencies rises, The Logic’s latest subscriber survey has found that the majority of subscribers believe cryptocurrencies are a risky investment, though half of respondents said they’d invested in it.

Fifty per cent of subscribers said they’d invested in cryptocurrency, while only 46 per cent said they hadn’t, yet just over 80 per cent said they viewed them as risky investments.

One subscriber, who said they had invested in crypto before and that they would again, said, “There is inherent risk and volatility, but I also believe that crypto … is a critical component of modern diversification.”

Indeed, cryptocurrencies are increasingly moving into the mainstream, with more major public companies and institutional investors adding them to their balance sheets. There are also more ways to invest in the sector—and more tokens to speculate on. Canada is leading the way with Bitcoin ETFs; Vancouver’s Dapper Labs helped bring NFTs to the mainstream with NBA Top Shot; and the cryptocurrency-trading platform sector is becoming regulated and professionalized. Additionally, “meme coins” like Shiba Inu, Tiger King and Omicron have posted massive gains this year.”

Yet a recent incident involving a new digital token, Squid, based on the popular Netflix show “Squid Game,” highlighted the risk that investors face. Squid’s price first soared, then suddenly plummeted to nearly zero in a “rug-pull,” in which developers funnelled off nearly US$3.4 million. 

When asked if these types of “rug-pull” incidents erode trust in the overall cryptocurrency market, 47 per cent of The Logic’s subscribers said yes, while 23 per cent said no. Twenty-one per cent said somewhat, and seven per cent said they didn’t know.

“That money is gone and no one knows where,” a subscriber wrote in reference to rug-pulling incidents. 

Another subscriber added that investors should be doing more research before investing in meme coins like Squid.

Those who said they had invested in cryptocurrency before were asked whether they would increase their investments within the next year, and 59 per cent of them said yes. Those who said they hadn’t invested before were asked if they planned to do so in the next 12 months. Half said no, while just five per cent said yes. 

About a third of subscribers said that the most important factor when deciding whether to invest was security. Nearly 20 per cent of subscribers said asset price was the most important. Just over one per cent chose social media or media attention, and another one per cent said energy consumption.

Meanwhile, regulators around the world are grappling with how to rein in the fast-moving sector as interest in cryptocurrencies rises. Canada’s securities regulators have been cracking down on crypto-trading platforms in recent months, leading to an increasing number of the biggest international exchanges—including FTX, Binance and Kraken—to either restrict or ban users in the country.

Even as more investors appear to be jumping into cryptocurrencies, many subscribers remain unsure. It’s “still too scary [as] it doesn’t seem like real money,” one subscriber wrote.

Still, others were optimistic about the sector’s future and what it could mean for the financial system. “It’s going mainstream and I believe [that] the concept is good and it could replace traditional banking in some parts,” a subscriber said.