Financial Conduct Authority (FCA) has confirmed an increase in the number of cryptocurrency holders in UK, arising from an increase in public interest and media coverage. Based on the findings from its recently conducted research, the FCA discovered a growing involvement of financial services players in the digital currency ecosystem, as well as increased interest from the government.
FCA Releases Report Confirming Rise in Crypto Adoption
Per the findings of the research, it was discovered that the number of crypto holders increased to 2.3 million, representing a growth from 3.9% to 4.4% of surveyed adults. Per the ownership terms, the average holdings also grew from £260 to £300 while the profile of crypto users is broadly unchanged from what was outlined in its 2020 report comprising majorly of males, over 35, and at AB social grade.
Per the report, as many as 78% of UK adults have heard about cryptocurrencies, a metric that has grown steadily across three major years including 2019, 2020, and 2021.
Other Key Highlights of the Report
While there are thousands of digital currencies out there, with new tokens being launched on a daily basis, the FCA report showed that Bitcoin (BTC), XRP, and Ethereum (ETH) are the top three most popular cryptocurrencies amongst UK investors. Bitcoin has the highest recognition with its percentage rising from 78% in 2020 to 82%.
However, despite the growing popularity of cryptocurrencies, the FCA indicated that “the overall level of understanding has fallen,” the report reads “This suggests there may be a risk of consumers engaging with cryptocurrency without a clear understanding of it.”
Per the report, only 71% of those profiled were able to correctly identify its definition from a list of statements.
The trend is significant in that it highlights a decline in understanding and a tilt towards the bandwagon effect-an an instance where people invest due to general public prompting.
Cryptocurrencies and their accompanying is becoming more popular by the day. While the UK report is unique to the country, the general level of awareness is growing, a situation that is drawing potential regulatory proposals amongst world governments.