Introduction
The Financial Conduct Authority (FCA) of the United Kingdom has been actively monitoring the crypto asset market to understand consumer behavior and potential risks. In June 2020, the FCA released its Consumer Research Report on Crypto Assets, shedding light on how UK consumers interact with crypto assets and the associated hazards. This report serves as a foundation for future regulatory frameworks.
Key Findings
- Growing Investor Base: Approximately 3.86% of UK adults (1.9 million people) owned crypto assets in 2020, up from 3% in 2019.
- Investment Patterns: 50% of holders owned assets worth ≤£260, while 20% held over 80% of the total market value.
- Media Influence: 45% of investors encountered crypto-related ads, with 35% claiming these ads influenced their purchase decisions.
- Regulatory Awareness: 89% of buyers understood that crypto assets lacked regulatory protection.
- Funding Sources: 8% of investors used borrowed funds to purchase crypto assets.
Methodology
The FCA conducted an online survey from December 13–21, 2019, with 3,085 respondents. The study included:
- Nationally Representative Sample: 73% (2,258 respondents) had heard of crypto assets.
- Crypto Asset Owners: A subset of 658 current/former holders provided detailed insights.
Sample Breakdown
| Category | Respondents |
|-----------------------------------|-------------|
| Nationally Representative Sample | 165 |
| Additional Crypto Owners | 493 |
| Total Crypto Owners | 658 |
Consumer Behavior
1. Investment Motivations
- Primary Reason: 47% viewed crypto investments as "gambling" (vs. 31% in 2019).
- Secondary Reason: Only 15% sought quick profits.
Top Purchase Drivers:
- Gambling-like speculation (47%).
- Long-term investment (22%).
- Diversification (19%).
2. Funding Sources
- 91% used personal savings or asset sales.
- 8% relied on borrowed funds (≈215,000 people).
👉 Explore crypto investment trends
Trading Platforms
- 77% used online exchanges.
- 5% exclusively used UK-based platforms.
- 83% traded via non-UK exchanges.
Top 5 Exchanges:
- Binance (Malta).
- Coinbase (US).
- Kraken (US).
- Bitfinex (Hong Kong).
- LocalBitcoins (Finland).
Investor Sentiment
- 85% of holders had no regrets, even during price declines.
- 17% reported negative experiences (e.g., theft, volatility).
FAQ Section
Q1: How many UK adults own crypto assets?
A1: Approximately 1.9 million (3.86% of adults).
Q2: Do crypto ads influence purchases?
A2: Yes—35% of investors said ads increased their likelihood to buy.
Q3: Are crypto assets regulated in the UK?
A3: No. 89% of buyers acknowledged the lack of regulatory protection.
👉 Learn more about crypto regulations
Conclusion
The FCA's report highlights the growing adoption of crypto assets in the UK, driven by media exposure and speculative interest. However, risks such as unregulated trading and leveraged investments remain prevalent. Policymakers must balance innovation with consumer safeguards to foster a secure market environment.
Report Collaborators: FCA, Bank of England, UK Government.