The Financial Conduct Authority (FCA) has published the results of its study into the impact of cryptocurrencies in the UK. The study was composed of two pieces of research, qualitative interviews and a quantitative national survey looking at consumer’s attitudes towards crypto-assets. It appears that British consumers are mostly uninformed about how the technology actually works and just see cryptocurrencies as a fast track to easy wealth.
Research firm, Revealing Reality, used qualitative interviews to focus on the attitudes, understanding, motivations and beliefs that underpin people’s decisions to purchase and use different crypto assets. The researchers interviewed 31 crypto consumers and selected 17 of them for a follow-up interview.
The desire to become “wealthy with minimal effort” is what initially attracted the respondents, and many expected the ones they they bought, in contrast to other investment options, to “increase in value steeply over a short period of time”.
The research found that particularly for the younger people in the sample, this seemed to be related to a “more general aversion to traditional forms of employment and an attraction to lifestyles of leisure and making easy money with little effort”.
Respondents indicated that social media influencers, friends and acquaintances were the key decisive forces for investing in crypto. They were often members of dedicated Facebook groups and communities, and several people followed Reddit threads for predictions on prices, news, and tips on what they should be buying.
Research Is Too Much Like Hard Work
The quantitative survey undertaken by Kantar TNS found that only eight percent of all cryptocurrency owners completed “deep research” before purchasing, with 16 percent doing no prior research at all. A surprising 70 percent of those surveyed had never heard of cryptocurrencies.
More than 50 percent of the surveyed crypto owners bought Bitcoin, while one in three chose Ethereum. More than half only bought one type of cryptocurrency. Nearly three quarters of owners agreed that a cryptocurrency purchase is a risk they are willing to take, with 62 percent believing that they are alternative investments to those offered in mainstream finance.
Terrifyingly, 35 percent of them have never checked the price of their coins, whereas 22 percent of them check the price daily.
As many people dismissively remind others on crypto Twitter, “this is who we are trading against”. Perhaps they have a point?