The number of UK adults holding cryptoassets has risen in the past year to 2.3 million, according to research published by the Financial Conduct Authority (FCA).

The regulator said the rising number of crypto asset holders, up from 1.9 million in the last 12 months, is evidence that attitudes to the digital assets have changed.

The research also found that 78 per cent of adults have now heard of cryptoassets, up from 73 per cent in a year.

The research found that more than a third (38 per cent) of crypto users regard them as a gamble (down from 47 per cent last year), while increasing numbers see them as either a complement or alternative to mainstream investments.

By contrast, the level of overall understanding of cryptocurrencies is declining, suggesting that some people who have heard of crypto may not fully understand its implication and potential risks, with only 71 per cent correctly identified the definition of cryptocurrency from a list of statements.

Enthusiasm for cryptoassets is growing, the research found, with over half of crypto users saying they have had a positive experience so far and are likely to buy more (rising from 41 per cent to 53 per cent in the last 12 months).

Fewer people also regret having bought cryptocurrencies, down from 15 per cent to 11 per cent.

1 in 10 who had heard of cryptocurrency said they are aware of consumer warnings on the FCA website. Of these, 43 per cent said they had been discouraged from buying crypto.

Most consumers recognise that crypto investments are not protected, although 12 per cent of crypto users believe otherwise.

Sheldon Mills, FCA’s executive director for consumers and competition said: “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.”

The research is the FCA’s fourth consumer research publication on cryptoasset ownership.

It is part of the FCA’s strategy to develop its thinking on the potential harms and benefits to consumers from cryptoassets and help better understand consumers’ attitudes and patterns of use.

During that period the FCA issued further consumer warnings, stating that investing in cryptoassets is high risk and that investors should be prepared to lose all their money.

The FCA said it would continue working closely with HM Treasury and other regulators, including through the UK Cryptoasset Taskforce.

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