The FCA stated after a new investigation that British people’s understanding of cryptocurrencies has increased, but their understanding of cryptocurrencies has declined. This indicates that there may be a risk that consumers participate in cryptocurrency without a clear understanding of cryptocurrency.

A new study by the UK Financial Conduct Authority shows that the country’s cryptocurrency ownership has increased significantly.

On Thursday, the FCA announced the results of a consumer survey that found that 2.3 million adults in the UK now hold cryptocurrency assets, an increase from 1.9 million last year. While the number of cryptocurrency investors has increased, the study also found a surge in holdings, with the median holdings rising from £260 ($370) in 2020 to £300 ($420).

The rise in the popularity of holding cryptocurrencies is consistent with the rise in awareness. 78% of adults said they have heard of cryptocurrencies, which is higher than 73% last year.

Although the awareness and holdings of cryptocurrencies continue to rise, FCA’s research shows that the understanding of cryptocurrencies has declined significantly, which suggests that some people who have heard of cryptocurrencies may not fully understand it.

According to the report, only 71% of respondents correctly identified the definition of cryptocurrency from a statement list, a 4% decrease from 2020. “This indicates that there may be a risk that consumers may participate in cryptocurrency without a clear understanding of cryptocurrency,” FCA pointed out.

Sheldon Mills, FCA’s executive director of consumer and competition affairs, said that some British investors have benefited from this year’s bull market. He added: “However, it is important for customers to understand that since these products are largely unregulated, if something goes wrong, they are unlikely to receive FSCS or Financial Ombudsman services.”

FCA’s research also stated that British consumers clearly prefer Bitcoin (BTC) over other cryptocurrencies, and 82% of respondents approve of BTC. According to the research report, 70% of people who approve at least one cryptocurrency only approve of Bitcoin, an increase of 15% from 2020. “It now appears that many adults who have now heard of cryptocurrency may only be familiar with Bitcoin,” FCA said.

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Post time: Jun-18-2021