Research published by the Financial Conduct Authority (FCA) reveals that 2.3 million adults now have cryptoassets. The number is 1.9 million higher than last year.
The research estimates that 78% of people have heard of cryptocurrencies while last year it was 73%.
The UK regulator’s analysis shows that as holding crypto has become commonplace, the attitudes toward these assets have changed. According to the research, 38% of crypto users view them as a gamble which is down since last year when it was 47%. Increasing number of people see cryptoassets as either a complement or alternative to mainstream investments.
However, the level of overall understanding of cryptocurrencies seems to be declining, meaning that some people have heard of crypto but not fully understand what it means, said the FCA. Only 71% people correctly identified the definition of cryptocurrency from a list of statements.
The FCA stated:
Enthusiasm for cryptoassets is growing with over half of crypto users saying they have had a positive experience so far and are likely to buy more (rising from 41% to 53%). Fewer people also regret having bought cryptocurrencies, down from 15% to 11%.
The research reveals that 1 in 10 of the people who have heard of crypto are also aware of the consumer warnings on the FCA website. 43% of these said that were discouraged from buying cryptocurrencies. Most consumers seem to realise that crypto investments are not protected, however 12% believe otherwise.
Sheldon Mills, FCA’s Executive Director, Consumers and Competition said:
The research highlights increased interest in cryptoassets among UK customers. The market has continued to grow, and some investors have benefitted as prices have risen. However, it is important for customers to understand that because these products are largely unregulated that if something goes wrong they are unlikely to have access to the FSCS or the Financial Ombudsman Service. If consumers invest in these types of products, they should be prepared to lose all their money.
This is the fourth consumer research publication on cryptoasset ownership by the FCA. The study is a part of the regulator’s strategy to help consumers and better understand their attitudes and patterns of use.
The FCA has issued further warnings during that period in order to offer more protection, stating that cryptoasset investments are high risk and may cause investors to lose all their money.
The regulator promised to continue to work closely with HM Treasury and other regulators, including through the UK Cryptoasset Taskforce.
Earlier this month, the FCA announced the extension of the Temporary Registrations Regime (TRR) for existing cryptoasset businesses to 31 March 2022. The regime was put in place last year to allow cryptoasset firms that applied for registration before 16 December 2020 to continue trading while their applications are being assessed.
