Bitcoiners Have Low Financial Literacy: Research

Alex Dovbnya

According to a research paper published by the Bank of Canada, Bitcoin investors are often financially illiterate

According to a new research paper published by the Bank of Canada, Bitcoin investors tend to exhibit low levels of financial literacy, Canadian newspaper The Globe and Mail Reports

At the same time, financially savvy Canadians are less likely to own the largest cryptocurrency, despite being more aware of it compared to the general population.

While Bitcoiners have a deep understanding of blockchain and crypto, they struggle with fundamental financial literacy questions, exposing themselves to greater financial risk.

The Bank of Canada is also expected to find that the majority of Bitcoin owners were males with high household incomes.

Most Bitcoiners consider the cryptocurrency as an investment vehicle, and only a small majority of respondents consider using it primarily as a means of payment.

The findings are based on a series of studies conducted from 2016 to 2020. Last year, Canada became the first country to approve a Bitcoin-based exchange-traded fund. The study does not take this development into account. It is also important to note that cryptocurrencies experienced a major spike in adoption in 2021.

Still, there are those Bitcoin adherents who believe that crypto can be a catalyst for increasing financial literacy as it prompts them to explore the origins of money. Another study, published last June, found a positive correlation between financial literacy and cryptocurrency investing.

Last month, the US Treasury Department launched a new educational initiative aimed at raising awareness about the risks associated with the new asset class. In January, a similar program was launched by basketball player LeBron James.

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