More people view crypto assets as acceptable investment, says UK watchdog

LONDON: More people see crypto assets as a mainstream investment rather than a “gamble” as ownership of bitcoin and similar crypto currencies has risen to 2.3 millon adults in Britain this year, the Financial Conduct Authority said on Thursday.

Regulators have repeatedly warned consumers about the “speculative” nature of largely unregulated crypto assets, with bitcoin hitting a high of around $64,899 in April before a sharp drop left it trading around at $39,344 on Thursday morning.

But people increasingly see crypto assets as a potential investment, even though the level of understanding of the sector is declining, the FCA said in its fourth study into crypto assets ownership.

The number of UK adults owning crypto assets has risen quickly from 1.9 million in 2020, the FCA said, adding that the number of people who view them as a gamble fell to 38% from 47% over the same period.

The average holding has risen to 300 pounds ($419.58) from 260 pounds, reflecting price rises, while ownership remains skewed to professional men over 35 years old, the FCA said.

Enthusiasm is growing, with over half of crypto holders saying they have had a positive experience so far and are likely to buy more, the FCA said.

Sheldon Mills, the FCA’s executive director for consumers and competition, said it was important for consumers to understand that the assets are largely unregulated.

“If consumers invest in these types of products, they should be prepared to lose all their money,” Mills said in a statement.

The latest survey also looked at stablecoins like Facebook’s Diem for the first time. Stablecoins seek to avoid volatility by being tied to an asset such as a currency.

Ownership of stablecoins is much lower, with 87% of crypto users saying none of the crypto currencies they bought were stablecoins.