As Bitcoin approaches new all-time highs, a recent study shows a troubling lack of financial literacy within the cryptocurrency community. The report, published by the crypto gaming platform PiP World, estimates the financial literacy rate among crypto enthusiasts at a mere 25%, significantly trailing the average financial literacy rate in the United States.
The findings, released on November 26, are based on a survey that collected 12,045 anonymous responses from crypto market participants between March 2022 and October 2024 via Coinfessions. The report evaluates crypto financial literacy as the ability to understand and make informed financial decisions, categorizing respondents into “high” and “medium” literacy levels.
PiP World CEO Saad Naja expressed concern over the findings, describing the current state of financial literacy in the crypto space as “dangerously low.” He emphasized the urgent need for education, stating that many traders are “navigating blind” in a rapidly changing market, lacking the essential knowledge required for success.
The report highlights the emotional toll on the crypto community, with many participants admitting to being “reactive, impulsive, and neurotic” in their trading behaviors. Notably, the study found that 70% of crypto investors reported experiencing losses, and 76% regretted their investment decisions.
The report also sheds light on the varying levels of financial literacy among different types of crypto investors. Whales, who represent 5% of the market, boast a remarkable financial literacy rate of 96%. Long-term holders, known as hodlers, make up approximately 11% of the community and exhibit an impressive literacy rate of 80%.
In contrast, speculative traders, the largest segment at 29%, have a literacy rate of 64%. Day traders, accounting for 6% of respondents, show the lowest financial literacy at just 27%. Additionally, those involved in pump-and-dump schemes, estimated to represent 18% of the investor base, have a financial literacy rate of 45%.