The FCA has issued its fourth consumer research publication on cryptoassets ownership, showing the results of a survey carried out in January 2021. This shows that an estimated 2.3 million UK adults (4.4% of the total) hold this form of investment, up from 1.9 million one year earlier. The median average amount held in cryptocurrency has risen from £260 to £300.

78% of respondents said that they had heard of cryptoassets, up from 73% in 2020 and up significantly from the 42% figure seen in the 2019 survey.

Of those who invest in cryptoassets, only 38% regard this form of investment as a gamble, down from 47% in the 2020 survey. Amongst users of crypto, 53% say they have had a positive experience and expect to buy more (up from 41%), and only 11% regret getting involved in this area (down from 15%).

Most investors are male (78% of all cryptoinvestors) and aged over 35 (70%).

29% of investors now say that they check their balance every day, compared to just 13% 12 months earlier.

66% of investors have all or part of their holding in Bitcoin, 35% use Ethereum, 21% Litecoin and 18% XRP/Ripple.

Perhaps the finding that gave the regulator the greatest cause for concern was that as many as 29% of those who indicated that they were aware of cryptocurrencies were then unable to correctly identify the definition of cryptoassets from a list of various statements. This also applied to 10% of existing investors.

The majority of respondents were aware that cryptoasset investment does not enjoy regulatory protection – 96% of those who hadn’t invested in crypto were aware of this. However, 12% of existing investors believe that their investments are protected.

Approximately half of investors said they agreed with the statement ‘I know I’ll make money at some point’, despite the considerable risks associated with this area.

Sheldon Mills, FCA’s Executive Director, Consumers and Competition said:

“The research highlights increased interest in cryptoassets among UK customers. The market has continued to grow, and some investors have benefitted as prices have risen. However, it is important for customers to understand that because these products are largely unregulated that if something goes wrong they are unlikely to have access to the FSCS or the Financial Ombudsman Service. If consumers invest in these types of products, they should be prepared to lose all their money.”