An Insight into the UK Cryptocurrency Market

The United Kingdom has over time proven to be a hub for fintech and financial innovation. Among the different financial innovation, the cryptocurrency market in the UK is one segment that has captured the imagination of many. Cryptocurrencies, once only a fringe interest to tech enthusiasts, have now taken center stage, influencing not just the financial markets but also the way people transact and invest. With an eye on the current and forthcoming trends, let’s delve into the rapidly evolving UK cryptocurrency market.

Snapshot of the UK Cryptocurrency Market Terrain

According to the Financial Conduct Authority (FCA), an estimated 2.6 million UK residents have bought crypto-assets. This figure is a significant 1.1 million increase from the year prior, indicating a surge in interest and interaction with this previously nascent market. In terms of the global crypto market capitalisation, the UK ranks fourteenth and is home to countless cryptocurrency exchanges, trading platforms, and blockchain start-ups.

Notable platforms for UK crypto enthusiasts include Cornix and 3Commas. Cornix boasts a successful track record of providing Telegram trading bots, enabling traders to automate their strategies, while with 3Commas, users gain access to a suite of ‘smart trading’ features – from trailing stop losses to concurrent take profit and stop-loss orders.

Examining Consumer Attitudes

A June 2020 survey by the FCA suggests that consumer attitudes toward cryptocurrencies are changing. More UK residents have an understanding of cryptocurrencies, and the levels of awareness about this asset class have clearly risen. In 2019, it was estimated that 73% of adults in the UK had heard about cryptocurrencies, compared to 42% in the previous year.

The Shift towards Institutional Acceptance

Big financial institutions that previously veered away from cryptocurrencies are now embracing them. This trend is partially fuelled by Bitcoin’s growing stature as a ‘digital gold’ and a potential hedge against inflation, increasing value stability. Traditional financial service providers are also beginning to offer cryptocurrency services, further strengthening institutional acceptance.

Government and Regulatory Landscape

While the UK cryptocurrency market is growing, it has not been without its legal and regulatory challenges. The UK government is still fine-tuning its approach to crypto-assets, and the regulatory landscape is ever-evolving. However, the country is committed to fostering innovation while ensuring consumer protection and maintaining financial stability.

• The FCA now requires all UK-based crypto businesses to have a registered license.
• The HM Treasury has proposed expanding the regulatory perimeter to include more types of crypto-assets.

Looking Forward: What Lies Ahead?

With increased institutional acceptance, governments’ evolving understanding and the growing popularity of cryptocurrencies, it is no wonder the future outlook of cryptocurrencies is promising.

• Payments: Cryptocurrencies could revolutionise the payments industry, providing cheaper and faster means of remitting money worldwide.
• Digital Reserve Currency: Bitcoin is being seen as ‘digital gold’, and there is increasing speculation that cryptocurrencies could become a digital reserve currency in the future.
• Smart Contracts: The growing popularity of DeFi (Decentralised Finance) suggests that cryptocurrencies could play a crucial role in creating and enforcing smart contracts.

Undeniably, the continuous emergence and evolution of trading platforms and technologies, such as Cornix and 3Commas, are going to play a significant role in shaping the path of UK’s cryptocurrency market.

However, investors are urged to be cognisant of the volatility, complexity, and potential risks associated with crypto investments, while being receptive to the unprecedented possibilities that this new digital frontier offers.