The Financial Conduct Authority, the United Kingdom’s financial services regulator, has published new research revealing steady growth in the number of adults who hold cryptocurrencies.
The research found that 2.3 million adults in the U.K. now hold crypto, up from 1.9 million last year. Awareness is also rising steadily, with 78% of adults now having heard of crypto, compared with 73% last year.
The FCA also found that enthusiasm for crypto is on the rise, with over half those who had invested in the sector saying they had a positive experience and are likely to invest again (up from 41% last year to 53%). This is perhaps to be expected, given the performance of bitcoin and other cryptocurrencies over the past 12 months.
Yet understanding of cryptocurrencies is in decline, according to the FCA. Its research shows that 71% of respondents were able to correctly identify the definition of cryptocurrency from a list of statements.
The FCA highlighted that many crypto projects are unregulated, pointing out that if something goes wrong an affected individual is unlikely to have access to the FSCS or the Financial Ombudsman Service for support.
"If consumers invest in these types of products, they should be prepared to lose all their money,” said Sheldon Mills, executive director of consumers and competition at the FCA.
The FCA has, over the past year, put in place measures to restrict consumer access to riskier forms of cryptocurrency trading. In January this year, the watchdog enforced a ban on the sale of crypto derivative products to retail investors, a move it estimated would prevent £53 million ($74 million) in consumer harm.