Financial Conduct Authority (FCA) has revealed that 12% of UK adults now own crypto assets, marking a rise from 10% in 2022. BaseFCA’sa survey of 2,199 UK adults, the FCA’s latest research highlights an unprecedented growth in cryptocurrency adoption,
with over seven million UK residents now holding digital assets, up from five million just a year ago. This surge due to Bitcoin and other digital currencies have seen a remarkable rally and global political events like the U.S election.
Rising an Investment in Crypto
The FCA study shows that crypto awareness is also on the rise, with 93% of UK adults now familiar with crypto, which is up from 91% in 2022. Meanwhile, the average value of crypto holdings has increased from £1,595 to £1,842, suggesting a growing confidence among investors. Notably, the proportion of individuals holding between £1,000 and £10,000 in crypto assets has jumped from 20% to 36%, reflecting a shift towards more substantial investments.
More than a quarter (27%) of crypto users reported investing more if given assurances of financial protection against losses. The FCA has responded to this demand for security, underscoring that crypto remains largely unregulated and high-risk. It urges investors to remain cautious and be prepared for the possibility of losing all their money.
The Role of Regulation in Crypto
As the UK’s crypto market grows, and it need better regulation. The Financial Conduct Authority (FCA) has highlighted the importance of clear rules to maintain market trust and protect consumers. Matthew Long, the FCA’s Director of Payments and Digital Assets, stressed the need for regulations that allow innovation while safeguarding investors.
To address this, the FCA is creating a new set of rules, aiming to introduce them by 2026. These will cover areas like stablecoins, crypto staking, and lending. Staking, where people lock up their crypto tokens to support blockchain networks in exchange for rewards, is a key focus.
The FCA also pointed out a misunderstanding among crypto users, with more people 20% now, up from 10% in 2022 thinking they are protected if something goes wrong with their crypto. The FCA reminded them that crypto is mostly unregulated, and they may not be eligible for compensation.
The survey found that 14% of crypto buyers now use credit cards or loans, up from 6% in 2022. This could pose a risk if the market turns down, making it harder for investors to repay their debts.
Who Is Investing in Crypto?
The survey found that individuals aged 18-34 and those with higher disposable incomes were more likely to invest in crypto. However, the study also noted that this group was more likely to hold misconceptions about the protections available to them, particularly in cases of losses.
Regarding specific assets, Bitcoin remains the most popular cryptocurrency, with 52% of crypto holders reporting ownership, followed by Ethereum (42%). However, the data also indicates a shift in the landscape, with a growing interest in other assets beyond the two leading cryptocurrencies.
Despite Bitcoin’s dominance, Bitcoin and Ethereum have slightly decreased ownership since the FCA’s last survey in 2021.
As the crypto market in the UK is growing, with seven million owners. However, as the FCA works on clearer regulations, it’s challenging to balance protecting consumers and encouraging innovation.
