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FCA says 2.3m UK adults now hold cryptos

By Adrian Holliday

09:01, 17 June 2021

UK commuters looking at smartphones

New research from the Financial Conduct Authority (FCA) claims 2.3 million UK adults now hold crypto assets compared to 1.9 million a year ago – a 21% climb.

However, as the FCA also points out, it does not “hold significant relevant data about them”. That’s because most crypto products are unregulated.

So if the market turns sour they are unlikely to have access to the Financial Services Compensation Scheme, the FCA dutifully points out, "or the Financial Ombudsman Service. If consumers invest in these types of products, they should be prepared to lose all their money”.

Cryptoassets now less risky?

The FCA’s research claims that holding cryptoassets is now judged rather less of a gamble compared to last year by the UK public.

“38% of crypto users,” the FCA said this morning, “regard them as a gamble (down from 47% last year), while increasing numbers see them as either a complement or alternative to mainstream investments.”

XRP/USD

1.46 Price
+0.640% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 22:00 (UTC)
Spread 0.01168

BTC/USD

98,115.55 Price
-1.320% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 22:00 (UTC)
Spread 106.00

ETH/USD

3,423.74 Price
+3.250% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 22:00 (UTC)
Spread 6.00

DOGE/USD

0.44 Price
+6.890% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 22:00 (UTC)
Spread 0.0012872

That’s almost a 20% fall. But the FCA then goes onto say that the level of overall crypto understanding is worsening, “suggesting that some people who have heard of crypto may not fully understand it, with only 71% correctly identified the definition of cryptocurrency from a list of statements”.

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No protection net – still

So it’s mixed news – more people consider nascent cryptos as a serious support to mainstream investments, yet with zero protection bolted to them if things turn bad.

Crypto volatility is extreme: just a month ago, Bitcoin plunged close to 30% as a major sell-off unwound. But then again, a year ago bitcoin was valued at $9,380. It's current $39,288 valuation means a 318% rise in value, despite some vertiginous volatility en route.

The FCA’s executive director, Consumers and Competition, Sheldon Mills says their research highlights “increased interest in cryptoassets among UK customers. The market has continued to grow, and some investors have benefitted as prices have risen”.

Read more: EU and UK passenger car sales rebound in May, but lag pre-pandemic levels

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