Crypto ownership spikes as 2.3 million Brits back digital currencies

Around 2.3 million Brits, or roughly 4.4% of the population, now own cryptocurrencies, the Financial Conduct Authority has said.

The figure is up from 1.9 million in 2020 as the sector reaches a more mainstream audience despite volatile price swings.

A consumer research paper published by the watchdog on 17 June, its fourth on the topic, showed cryptocurrencies have become more commonplace with 78% of adults saying they had heard of them compared to 73% a year earlier. Fewer respondents regard the tokens as a “gamble” now, at 38% down from 47% a year ago.

However, the FCA said that levels of cryptocurrency knowledge are in decline, “suggesting that some crypto users may not fully understand what they are buying”.

Cryptocurrencies such as bitcoin and ether have been on a broader price rally since October last year, as institutional interest in the sector bolstered investors. The FCA’s research was conducted in January, prior to major rises and falls for cryptocurrencies that saw bitcoin reach an April high of $64,829 before falling to around $31,000 last month.

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“The market has continued to grow, and some investors have benefited as prices have risen,” said Sheldon Mills, the FCA’s executive director of consumers and competition.

“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 Financial Services Compensation Scheme or the Financial Ombudsman Service. If consumers invest in these types of products, they should be prepared to lose all their money.”

The average crypto holding among consumers has risen from £260 to £300, but the profile of a typical crypto owner has not changed — with most being upper-middle class men aged over 35.

More people are seeing cryptoassets as an alternative or complement to mainstream investments, the FCA’s research suggested, and half of crypto users say they intend to invest more.

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The FCA has continued to issue warnings to consumers, stating that investing in cryptocurrencies is a high-risk venture that could wipe out the value of their entire holding.

In its research, the regulator found only 1 in 10 people who had heard of cryptocurrencies said they were aware of consumer warnings on the FCA’s website.

While most consumers recognised that their crypto investments are not protected, around 12% of users thought otherwise. Of those who had seen the FCA’s warnings, 43% said they were discouraged from buying crypto in future.

Speaking to the FCA for its research in January, more than half of users said they had had a positive experience with cryptocurrencies so far. Fewer people also regretted buying crypto, falling from 15% to 11%.

To contact the author of this story with feedback or news, email Emily Nicolle

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