Cryptocurrency might just be a popular buzzword after all after a new study by the United Kingdom Financial Conduct Authority (FCA) revealed that 73 percent of consumers in the country do not know what a cryptocurrency is and are further unable to define what it is.
The results which were released yesterday state that in the UK, men between the ages of 20 and 44 are most likely to be unaware of what cryptocurrencies are. The FCA’s survey included the responses from 2,132 respondents and this was done in collaboration with Kantar TNS which is a market research firm based in London. Out of the total sample, only 3 percent had bought cryptocurrencies.
Even out of those who had ever dealt in cryptos, spent only a measly $263 and that too only in the two most popular cryptos, Bitcoin(50%) and Ether (34%).
The FCA’s qualitative insight into the minds of consumer behaviour regarding crypto was even more disarming as it revealed a rather problematic view people held about the digital tokens. Partnering up with a research agency, Revealing Reality, they found out that most consumers did little or no research before investing in crypto assets and that most never actually fully understood what they were getting themselves into.
As per the report, most crypto buyers were just hoping to ‘get rich quick and stated that they wanted to engage in crypto buying due to their friends and social media influencers.
Christopher Woolard, who is the FCA’s executive director of strategy and competition said in a statement,
“The results suggest that although cryptoassets may not be well understood by many consumers, the vast majority don’t buy or use them currently. Whilst the research suggests some harm to individual cryptoasset users, it does not suggest a large impact on wider society. Nevertheless, cryptoassets are complex, volatile products – consumers investing in them should be prepared to lose all of their money.’
The FCA also warned cyrptoasset owners that since, “the transfer, purchase and sale of such tokens currently fall outside our regulatory remit. This means it is unlikely that consumers will be entitled to make complaints to the Financial Ombudsman Service or protected by the Financial Services Compensation Scheme if things go wrong. ”
In conclusion, the FCA did assure concerned consumers that they were working with the government and the Bank of England to ensure that proper regulatory guidelines are enforced and implemented. The watchdog has also warned several times on cryptocurrency derivatives products and unregistered crypto brokerage firms.