The UK Financial Conduct Authority (FCA) reports a 1.1 million spike in the number of UK consumers who have bought bitcoin or another cryptoasset, since a face-to-face survey it carried out a year ago.
An estimated 2.6 million UK consumers have bought cryptoassets at some point, says the in-depth research conducted by the UK financial watchdog.
The findings are based on research in which 2,681 participants were surveyed. The survey, conducted online by pollster YouGov, found that 1.9 million consumers still held their cryptoassets with half owning more than £260 worth.
Explaining the research methodology, the FCA said: “Of the 2,188 consumers who have heard of cryptoassets and completed the questionnaire, 165 had purchased cryptoassets. We boosted the sample of cryptoasset owners with a further 493 consumers and a total of 2,681 proceeded with answering a number of follow-up questions about their experiences.”
Crypto buyers are knowledgeable and aware of risks
Other key findings of the research are:
- The majority of cryptoasset owners are generally knowledgeable about the product, are aware of the lack of regulatory protection afforded and understand the risk of price volatility;
- An estimated 300,000 cryptoasset owners believe they have protection, which leaves them at potential risk of financial harm;
- Adverts play a key role in influencing cryptoasset consumers’ decisions, with more than a third of respondents saying an advert made them more likely to purchase cryptoassets.
The research also found that 83% bought cryptoassets on non-UK based exchanges. 24% held their crypto holding offline – the most secure way to hold the assets, while 46% store their crypto on the exchange at which they purchased the asset.
Other findings showed a high level of understanding among crypto owners, with 89% aware of they would not receive the same protections as regulated investment products and 92% able to correctly define a cryptoasset.
More than a quarter use crypto to buy stuff
Another encouraging discovery was that 27% had used crypto to buy other products and services.
The FCA’s Interim Executive Director of Strategy and Competition, Sheldon Mills, said:
“This FCA report reveals the increasing popularity of cryptoassets among the UK consumer population and underlines the importance of our work to gain a deeper understanding of this market and how people interact with these assets.
“Cryptoassets present risks and opportunities for consumers and we hope these insights will help inform the policy debate in the UK and internationally as the use of these assets continue to grow.”
Later this year the FCA will be clarifying its position on the banning of certain cryptoasset derivatives being sold to retail investors.
The FCA works with the UK government and Bank of England, as part of a UK Cryptoassets Taskforce.
The full FCA research note is available here.