Indications that cryptocurrency investment is gaining traction across geo-political zones globally have further been demonstrated as crypto asset ownership in the UK surged by a fifth to 2.3 million people from 1.9 million last year.
Findings by the Financial Conduct Authority (FCA), UK financial regulator, showed that awareness about cryptocurrency trading and investments were also rising with the number of adults that have heard of crypto assets now standing at 78 per cent, up from 73 per cent a year earlier.
The FCA stated on Wednesday that the development reflected that more people now consider crypto a viable investment option.
The regulator, however, cautioned consumers that crypto assets remained largely unregulated in the UK and they must “be prepared to lose all their money” if they decide to invest in them.
Commenting, the FCA executive director, Sheldon Mills, said: “The market has continued to grow, and some investors have benefited 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”, he stressed
The FCA’s warning is coming on the heels of an earlier warning last month by the Governor, Bank of England, Andrew Bailey, warned investors on trading in cryptocurrencies.
He described cryptocurrencies such as Bitcoin and Ethereum as lacking “intrinsic value.”
The governor further clarified: “Now that doesn’t mean to say that people don’t put value on them because they can have extrinsic value. But they have no intrinsic value,”
Despite the increasing interest of investors in crypto assets, the FCA research found that the overall level of understanding of cryptocurrencies is on the decline.
According to the UK financial regulator, the research, which was conducted in January, indicated that some people who had heard of crypto assets may not fully understand what they meant.
The findings showed that only 71 percent of those interviewed correctly identified the definition of cryptocurrency from a list of statements.