Why UK investors are looking to digital assets to beat inflation

Inflation is once again making headlines, with the UK currently experiencing a rate of 3.8%, the highest among G7 nations this year. As a result, many investors are seeking ways to protect their purchasing power.

Traditional safe-havens such as cash or low-yield bonds typically offer little real return after inflation, prompting some UK investors to look to digital assets as a real alternative. Recent Bitpanda UK research found that 6.5 million Brits currently have cryptoasset investments, with one in five (22%) of these saying they have turned to digital assets in response to inflation or economic instability.

The appeal of digital assets

The Bitpanda UK research also found almost a quarter (22%) of UK adults now see cryptoassets as a legitimate long-term investment, and many are pairing it with traditional products like stocks, savings, and pensions. In fact one in seven (15%) are planning to invest in cryptoassets in the future, suggesting that current levels of adoption are set to rise.

At the same time, regulatory shifts are enabling access to digital-asset investment vehicles: the FCA has recently lifted its ban on retail access to crypto exchange-traded notes (ETNs), opening up new avenues for everyday investors. These structural changes mean UK investors increasingly see digital assets as part of a standard portfolio strategy.

Who is investing in crypto

Younger and tech-savvy investors in the UK are often more comfortable with digital assets and more willing to allocate to them. Bitpanda UK research shows 40% of adults aged 18-24 have invested in crypto in the past, almost double the national average of 21%.

And these UK investors consider crypto to be a long-term investment. The top goals are to build long-term wealth (46%), diversify investment portfolios (35%), and save for children or their family (33%).

People aren’t rushing in blindly though. Bitpanda UK’s data shows that a third (35%) of current cryptoasset investors say their investment approach is “carefully researched” rather than hype-driven. As such Bitpanda provides tools such as the Bitpanda Crypto Index, which automatically tracks and rebalances a diversified basket of leading cryptocurrencies, helping investors gain broad exposure to the market in a transparent way.

So what should investors keep in mind?

Digital assets may offer upside potential, but as with all investments, there are risks and digital assets should always be considered as a part of a diversified portfolio. Crucially, understanding that digital assets are not a guaranteed inflation hedge is essential.
But overall, the UK investment trends show that cryptoassets are no longer just for early adopters. People are exploring it alongside more traditional options, not to replace them, but to diversify their financial position and navigate an increasingly volatile economic environment.