New UK Financial Watchdog Survey: Every One-in-Three Bitcoin Buyer is a Hodler
According to the survey commissioned by the UK financial watchdog, the Financial Conduct Authority (FCA), only about a handful of UK population has bought bitcoin or other cryptocurrencies.
Driven by FOMO & Get Rich Quick
The UK publication MoneyWise reported that about 3 percent of the consumers actually bought a cryptocurrency. This survey involved an in-depth study of 31 consumers that bought cryptos driven by “FOMO” and “get rich quick” urges.
Among this consumer sample was Ashton, 26, a musician who told the researchers his motivation behind getting into crypto:
“I guess I didn’t have the career that my parents wanted, but I’m lazy. My priority is enjoying life. I just want to get rich and retire.”
While, Karina, 31 who is a police officer in London and bought £1,500 worth of Bitcoin, Ethereum, and Litecoin in the second half of 2017 has been driven by FOMO:
“I remember reading media online which was basically saying: jump on the boat now, or you won’t be jumping on it at all.”
However, among these consumers an estimation of 73 percent don't really know how cryptocurrency actually works. Additionally, FCA found that these buyers and those that have the knowledge of crypto are majorly young between the age group of 20 and 44 and are male.
UK Watchdog: Damage to Crypto Users don’t have Large Impact
In the second survey that has a much larger sample space of 2,132 consumers went through face-to-face interviews by Kantar TNS. Out of this, only 7 percent of those that haven’t bought crypto would consider doing so in the future.
Bitcoin, the leading cryptocurrency has been the most popular choice followed by the second-largest crypto Ethereum.
It has been further discovered by the FCA that the level of understanding about cryptos is low even among the people who had purchased. Furthermore, the damage to the individuals’ finance after Bitcoin price crashed more than 80 percent may have been overstated as a majority of crypto owners made the purchase out of their disposable income.
“The results suggest that although crypto assets may not be well understood by many consumers, the vast majority don’t buy or use them currently,” said Christopher Woolard, the executive director of strategy and competition at FCA. “Whilst the research suggests some harm to individual crypto asset users, it does not suggest a large impact on wider society.”
Online media Influence in Buying
According to other survey findings, only 8 percent conducted a “deep research” while 16 percent didn't do any research whatsoever. What’s surprising is that about one in three buyers hasn't checked their holding valuation since purchase.
This brings us to the hodlers who sees cryptocurrencies as the long term investment. About 40 percent of the owners plan to hold their coin for at least three years.
Online media has the highest influence that is 23 percent on the buyers followed by traditional media (22%), friends and family (16%), social media (15%) and online ads (10%).
However, a lack of knowledge means consumers can fall prey to scams. In the light of this, last year, FCA formed the UK Cryptoassets Taskforce. Currently, the FCA is conducting a consultative process for which the submission from consumers and industry ends on April 5th.