A few weeks ago, the European Central Bank (ECB) raised concerns that the adoption of Crypto is rising at a fast pace. In this regard, the EU apex bank said that it is concerned that this posed a risk to the financial system and revealed a roadmap for implementing a roadmap for regulation.
In the UK, Her Majesty’s Revenue and Customs, in conjunction data firm known as Kantar, conducted a study that shows that 5 million citizens have bought Crypto in the last few years. This is a significant jump from earlier projections that indicated that only 2.3 million people owned Crypto.
What the Survey Report Is Showing
HMRC’s report shows that of the 5 million Crypto users in the UK, 55% are hodlers who have not placed their Crypto for sale. The report does not indicate the motive for hodling, although some experts anticipate this could be due to a lack of buyers. This is, however, not factual since the Crypto market is dynamic and growing, especially with an increasing adoption by institutional investors. Moreover, besides Stablecoins, the number of Tokens traded in Crypto exchanges is usually meager vis-a-vis the supply.
Crypto Instruments Are Increasingly Preferred in Storing Wealth
In the survey, 19% said Crypto is a core investment in their wealth portfolio. This is a growing trend, and leading institutions like Tesla have digital assets on their balance sheet.
For example, the Coinmarketcap index shows that out of the 19 million BTC tokens that have been minted, only 1.4 million have been transacted in the last 24 hours. Less than 10% of the available supply indicates that most Crypto investors are hodlers.
Regarding age, 76% were under 45 years. 69% were male, and out of the 5 million adopters, 7% own digital assets worth more than £5,000, and 52% had portfolios of £1,000 and below.
The Crypto Winter Is a Concern for Regulators
The UK has one of the most advanced financial systems in the world, and yet the adoption of Crypto is growing. Following the release of the HMRC report, the Bank of England is raising concerns that Cryptos pose a risk to the financial system. The lender of last resort sits the ongoing Crypto winter that has led to a significant devaluation of market capitalization.
The Bank further believes that the unanticipated increases in interest rates worldwide will batter the Cryptos leading to quick adjustments.
Nonetheless, the financial regulators in the UK are not mulling any ban or restriction on Crypto trading. This means that the adoption rate will continue to rise, especially in the ongoing bearish market that allows people to buy the dip.