Crypto Investors beware!
Crypto Investors beware!
The number of adults in the UK owning a form of cryptocurrency continues to increase, as well as the average amount held, but – BEWARE – a lack of regulations means it is still a high-risk investment.
With 93% of the UK population now being aware of cryptocurrency, the concern is that the most common source of information is coming from friends and family.
Although over 90% of the population are aware of the existence of cryptocurrency, just 12% of the UK population hold some form of the digital currency, up from 10% in 2023, according to the latest figures from the Financial Conduct Authority (FCA).
The average amount of crypto held by each person has increased to £1,842, which could be due to the recent increase in the value of Bitcoin influencing the rest of the crypto market.
The director of payments and digital assets at the FCA, was quoted as saying: ‘We want clear regulation that supports a safe, competitive, and sustainable crypto sector in the UK. We want to develop a sector that embraces innovation and is underpinned by market integrity and consumer trust.’
But with 20% of people saying they were influenced to invest in crypto by their family and friends, and 26% of people using all of their savings to fund their investments, the sector remains high risk. The FCA found 14% of investors are also using their credit card or overdrafts to fund their investments!
As crypto remains largely unregulated in the UK and high-risk. If something goes wrong, it is unlikely you will be protected so you should be prepared to lose all your money. FCA research found that 9 in 10 investors do carry out research before investing, but a third believed they could contact the FCA if a problem was to arise, and they needed to seek financial protection.
By the end of 2024 the FCA intends to have discussion papers for admissions and disclosures and market abuse published according to its FCA Crypto Roadmap. The FCA have said that admissions and disclosures to investors is ‘fundamental to investor protection’ for them to make sensible investments.
The regulation of crypto assets was agreed in October 2023 by the previous government, and the current government intends to continue with the reforms.