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Consumer interest in cryptocurrencies grows as understanding of risks declines

Consumer interest in cryptocurrencies grows as understanding of risks declines

New research from the UK's Financial Conduct Authority has found that excitement about the rising valuations attached to cryptocurrencies has firmly penetrated the retail consumer market.

Overall, public awareness and the FCA's estimate for ownership is up to around 2.3 million, up from around 1.9 million in 2020 - and 78% of adults have now heard of cryptocurrencies.

The consumer research shows that as holding cryptoassets has become more common attitudes to them have changed. Just 38% of crypto users regard them as a gamble (down from 47% last year), while increasing numbers see them as either a complement or alternative to mainstream investments.

At the same time, the level of overall understanding of cryptocurrencies is declining, with only 71% correctly identified the definition of cryptocurrency from a list of statements.

Sheldon Mills, FCA’s executive director, consumers and competition says: "The research highlights increased interest in cryptoassets among UK customers. The market has continued to grow, and some investors have benefitted as prices have risen. However it is important for customers to understand that because these products are largely unregulated that if something goes wrong they are unlikely to have access to the FSCS or the Financial Ombudsman Service. If consumers invest in these types of products, they should be prepared to lose all their money."

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