The number of Britons who own cryptocurrencies has grown to around 2.3 million as fewer and fewer consumers think putting money in the nascent market is a gamble.
The Financial Conduct Authority said yesterday that its latest research indicated that around 400,000 additional adults had recently purchased bitcoin and other cryptoassets. The regulator’s survey suggests that 4.4% of the adult population owns cryptocurrencies, up from 3.9% in 2020.
Median holding rose to £ 300 from £ 260, and the biggest investment in value reported in the survey was £ 7million, from £ 30,000 a year ago.
Even as ownership increases, the watchdog has found that the public’s understanding of assets is declining. His research also showed that 14% of consumers had borrowed to invest in the crypto market, trends that may be of concern to regulators.
Cryptocurrencies such as bitcoin only exist as strings of computer code and, unlike conventional forms of currency, are not controlled by governments or central banks. The FCA believes that these assets have no intrinsic value and that their high volatility puts consumers at risk.
Cryptocurrencies are mostly unregulated. If investments explode, consumers are unlikely to be eligible for recourse from the Financial Services Compensation Scheme, the rescue fund for the investment industry.
Global regulators are also concerned that the cryptomarket could be exploited by money launderers and other criminals.
Rick Eling, chief investment officer at Quilter Financial Planning, part of Quilter, the wealth manager, said: “The fact that participation in cryptocurrencies is up but understanding is down paints a troubling picture. “
The FCA’s findings are based on an online survey of 2,568 people, 146 of whom were former or current crypto-asset investors. This sample was completed by 994 people who owned or had previously owned digital assets.
Bitcoin went from just under $ 29,000 at the start of the year to over $ 64,000 in April, but has now fallen below $ 39,000.