The Financial Conduct Authority (FCA) has revealed a significant increase in cryptocurrency ownership in the UK, with 12% of adults, or roughly one in eight people, now holding digital assets. This marks a rise from 10% in previous surveys, underscoring the growing interest in an unregulated and volatile market.
Public awareness of cryptocurrencies has also surged, with 93% of respondents indicating familiarity with digital assets. However, the FCA has issued a stark warning about the risks associated with investing in crypto, emphasizing the lack of regulatory protections and the potential for significant financial losses.
Crypto Popularity Grows Alongside Risks
The FCA’s survey highlights the growing financial commitment among crypto holders. The average value of cryptocurrencies held by Britons has risen to £1,842, compared to £1,595 in earlier studies. Despite this increased investment, many Britons rely on informal advice when entering the crypto market.
“Information from family and friends” was cited as the most common source of guidance for individuals who had never purchased cryptocurrency before. Alarmingly, one in 10 respondents admitted to doing no research prior to buying digital assets, leaving them vulnerable to the market’s inherent risks.
Misconceptions About Investor Protections
The FCA’s findings also revealed widespread misconceptions about consumer protections in the crypto market. Nearly one-third of respondents mistakenly believed they could seek recourse or financial protection through the FCA if they encountered problems with their investments.
The regulator stressed that cryptocurrencies remain largely unregulated, with limited rules in place to safeguard investors. This lack of oversight leaves consumers exposed to potential scams, market manipulation, and other risks.
FCA Calls for Clearer Regulations
Matthew Long, a senior figure at the FCA, emphasized the need for robust regulations to create a safer and more trustworthy crypto sector in the UK.
“Our research results highlight the need for clear regulation that supports a safe, competitive and sustainable crypto sector in the UK,” he said. “We want to develop a sector… underpinned by market integrity and consumer trust. We’re committed to working closely with the Government… industry and consumers to help us get the future rules right.”
Balancing Innovation and Protection
As cryptocurrencies continue to gain traction among Britons, the FCA’s findings underscore the urgency of establishing a regulatory framework to protect investors. While the appeal of digital assets grows, consumers must remain vigilant and informed about the risks associated with an unregulated market. The push for clear, enforceable rules may help strike a balance between fostering innovation and ensuring financial stability.
