A huge 93% of the population of the UK are aware of cryptocurrency, with the most common source of information being from friends and family.

Although over 90% of the population are aware of the existence of cryptocurrency, just 7m adults (12% of the UK population) actually hold some form of the digital currency, up from 10% in 2023, showed the latest figures from the Financial Conduct Authority (FCA).

Additionally, the average amount of crypto held by each person has increased to £1,842, from £1,595. However, this could be due to the recent surge in the value of Bitcoin influencing the rest of the crypto market particularly after the US elections with one Bitcoin valued at £73,491 this week.

Matthew Long, director of payments and digital assets at the FCA, said: ‘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.’

The regulator is looking to ensure a stable investment environment which could encourage more people to enter the market.

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, along with the lack of security and regulations, the sector remains high risk. as well ads this, the FCA found 14% of investors are also using their credit card or overdrafts to fund their investments.

Long added: ‘Currently, 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.’

The FCA research found that nine 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.

Chris Recker, legal director at Kingsley Napley said: ‘The FCA’s research shows the ever-growing appeal of the crypto assets space for UK investors from novices to sophisticated financial professionals. 

‘However, we also find there is often a perception this is a more regulated space than is the case which is worrying.

‘Not only can people lose their investment due to poor investment decisions, but scammers frequently operate in this sector duping people out of sizeable sums.’

By the end of this year the FCA intends to have discussion papers for admissions and disclosures and market abuse published according to its FCA Crypto Roadmap. The FCA said that admissions and disclosures to investors is ‘fundamental to investor protection’ for them to make sensible investments.

Economic secretary to the treasury, Tulip Siddiq said: ‘It is clear that cryptoassets are here to stay. The number of people that own crypto is rising year-on-year, in the UK and globally. And of course, in the last couple of weeks developments in the US have led to a big surge in cryptoasset markets.

‘But it is important that we don’t see traditional financial services and cryptoassets as two wholly separate islands with no means of crossing between.’

The regulation of cryptoassets was agreed in October 2023 by the previous Conservative government, and the current government intends to continue with the reforms.

Siddiq said: ‘Those proposals included the creation of various new regulated activities for cryptoassets, such as operating a cryptoasset trading platform, as well as associated regimes for both admissions to trading and market abuse.

‘I can confirm that those proposals still stand, and that the government intends to implement them in full.’