According to a recent survey by the Financial Conduct Authority (FCA), which is working with the Government and the Bank of England, as part of a UK Cryptoassets Taskforce, more and more people are now aware of cryptos and getting into them. The survey states,
“We estimate 3.86% of the general population currently own cryptocurrencies. This amounts to approximately 1.9 million adults with the UK population (over 18) taken to be approximately 50 million.”
It is also estimated that 5.35% (2.6 million people) hold or held cryptocurrencies, up from 3% (1.5 million people) in 2019.
In this latest survey, 73% of adults compared to 42% last year have found to be heard of cryptos. Traditional media and online news are playing a part in this awareness with 28% of adults that were aware of cryptocurrencies had seen an advert.
Meanwhile, 45% of crypto owners have also seen a related advert and 35% of them said it made the purchase more likely. But those influenced were also more likely to subsequently regret the purchase. Crypto owners also understand the risks associated with the lack of protections, but the agency still states,
“the lack of such knowledge among some presents potential consumer harm to consumers.”
Bitcoin & Libra is all we know about
The research was conducted by FCA from 13 to 21 December 2019, with a nationally representative online panel of 3,085 respondents. After screening out those who haven’t heard about crypto, the agency added 483 individuals to the sample who were crypto owners for the “longer questionnaire.”
These crypto owners have a high technical knowledge and it has been found that 75% of them hold under £1,000, roughly $1,230, and half of them hold under £260, nearly $320.
Bitcoin remains the most recognized crypto while Libra, which doesn’t exist yet, 22% had heard about this upcoming stablecoin from Facebook.
Testing the knowledge of cryptocurrency owners it was found 90% conducted some research before purchasing cryptocurrencies, compared to 84% in 2019.
Speculation, Regulation, & Coinbase Domination
The most popular reason for buying cryptos remains speculation – ‘as a gamble that could make or lose money’ rather than as an investment of money.
Those investing for speculation purposes were also more likely to hold their cryptocurrencies for more extended periods. In comparison, those displaying a lack of basic knowledge tend to hold their cryptocurrencies for shorter periods.
While 12% never monitor the value of their holdings, 15% regret having purchased.
Almost 50% of cryptocurrency owners have never used digital assets, but a good 27% did use them to purchase goods and services.
Moreover, 31% of respondents who currently own crypto currently do not intend to purchase more crypto because they consider it too risky. 29% of these will buy more if it is regulated in the future.
Interestingly, 73.2% of consumers that do not currently own but plan to purchase cryptocurrencies in the future reported that the lack of regulatory protection has impacted their decision not to buy cryptocurrencies to date.
Unlike the previous times, this survey found that 8% of respondents used borrowed money to purchase cryptos. But these borrowers were most likely to be the ones displaying a lack of knowledge surrounding the technology underpinning cryptocurrencies or the absence of regulatory protections.
The crypto purchases were made majorly (83%) using only non-UK based exchange, with Coinbase being the most popular one with 63% followed by Binance (15%), Kraken (10%), Bittrex (8%), and Bitfinex (7%).
Also, a good 46% store their crypto on the exchange where they bought it, and only 24% keep it in on offline hardware.