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 a low level 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 to have deep knowledge of blockchain and crypto, they struggle with basic financial literacy questions, thus exposing themselves to bigger financial risks.
Expectedly, the Bank of Canada has also found that the majority of Bitcoin owners were men with high household income.
Most Bitcoiners view the cryptocurrency as an investment vehicle, with only a slim majority of the respondents considering using it primarily as a means 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. The research doesn’t take this development into account. It is also important to note that cryptocurrencies experienced a big spike in adoption in 2021.
Still, there are those Bitcoin proponents believe that crypto could be a catalyst for increasing financial literacy since it makes them explore the origins of money. Another study, which was published last June, has found a positive correlation between financial literacy and cryptocurrency investing.
Last month, the United States Treasury Department launched a new educational initiative that is meant to raise awareness about risks associated with the novel asset class. In January, a similar program was launched by basketball star LeBron James.