TORONTO — A study by the Ontario Securities Commission suggests five per cent of Ontarians own what the regulator calls “cryptoassets” such as Bitcoin or Ether and awareness is increasing, but knowledge is lacking.
The online survey conducted in March also showed that 1.5 per cent of respondents say they have participated in an initial coin offering, in which investors usually buy digital tokens that can be kept, sold or traded.
However, when the 2,500 Ontarians surveyed were asked to identify true statements about these digital assets, just 34 per cent were able to do so, according to the OSC.
“We did find there is a lot of awareness of the sector, and people are increasingly participating or being approached, but that understanding and knowledge and comprehension of the sector is lagging,” said Tyler Fleming, the director of the regulator’s investor office.
The survey comes about a month after the provincial regulator joined forces with its peers in the U.S. and Canada to warn investors about cryptocurrency-related investment schemes.
Dubbed Operation Cryptosweep, the project has resulted in dozens of inquiries and investigations, and pending or completed enforcement actions related to initial coin offerings or cryptocurrencies since the beginning of May, according to the North American Securities Administrators Association.
The OSC also said in April it was gathering information on several cryptocurrency trading platforms after it received a number of complaints.
The B.C. Securities Commission and the Bank of Canada have also issued warnings about investing in cryptocurrencies. In December, central bank governor Stephen Poloz sounded the alarm on Bitcoin, calling the purchase of the cryptocurrency “closer to gambling than investing.”
Some of Canada’s biggest banks earlier this year halted the purchase of cryptocurrencies using their credit cards as well.
Meanwhile, the price of Bitcoin has plummeted since the beginning of the year, from roughly US$13,440 on Jan. 1 to US$6,100 on Thursday, according to Bitstamp.net.
The OSC’s survey suggests that on top of the five per cent who currently own a cryptoasset, an additional four per cent of Ontarians say they used to own one.
Men aged 18 to 34 were more likely to report owning a cryptoasset, at 14 per cent.
Most people aren’t spending huge amounts of money on cryptocurrencies and other digital assets, with just over half saying they spent less than $1,000 or no money at all to acquire them.
The survey suggested that roughly five per cent of cryptoasset owners did spend between $10,000 and $19,999, and another four per cent spent more than $20,000.
Most cryptoasset owners made their purchases using cash savings, at 55 per cent, but 26 per cent said they used their credit card. Fourteen per cent received them for free.
Of the purchases, 37 per cent were made within the past year, but nearly as many were made during the past three months, at 35 per cent.
As well, the study showed that 12 per cent of Ontarians had been approached about or sought information themselves about an ICO. Most were approached via social media, at 39 per cent, followed by friends or family at 33 per cent.
“It’s clear that interest in this sector is not going to disappear any time soon,” said Fleming.
“So as time goes by, as people become more familiar with the product, we would certainly expect people to be doing more research, understanding the different types of products and risks out there.”
The polling industry’s professional body, the Marketing Research and Intelligence Association, says online surveys cannot be assigned a margin of error as they are not a random sample and therefore are not necessarily representative of the whole population.