Bitcoiners Have Low Financial Literacy: Research
Bitcoin investors tend to be financially illiterate, according to a research paper published by the Bank of Canada
According to a new research paper published by the Bank of Canada, Bitcoin investors tend to display 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 biggest cryptocurrency, despite being more aware of it than the general population.
Although Bitcoiners have deep knowledge of blockchain and cryptography, they struggle with basic financial literacy issues, thus exposing themselves to greater financial risks.
Predictably, the Bank of Canada also found that the majority of Bitcoin owners were men with high family incomes.
Most Bitcoiners view cryptocurrency as an investment vehicle, with only a slim majority of respondents considering using it primarily as a form of payment.
The findings are based on a series of surveys that were conducted over the period from 2016 to 2020. Last year, Canada became the first country to approve a Bitcoin-based exchange-traded fund. Research does not take this development into account. It is also important to note that cryptocurrencies have seen a surge in adoption in 2021.
Still, some bitcoin proponents believe crypto could be a catalyst for increasing financial literacy, as it makes them explore the origins of money. Another study, published last June, found a positive correlation between financial literacy and cryptocurrency investment.
Last month, the US Treasury Department launched a new educational initiative aimed at raising awareness of the risks associated with the new asset class. In January, a similar program was launched by basketball star LeBron James.