As the cryptocurrency market matures, education and research become an absolute necessity. Unfortunately, most investors succumb to the enticing promises of crypto projects without thinking about the tip of the iceberg.
Despite its growth, the cryptocurrency market is still little known, making it a breeding ground for disinformation and FUD (fear, uncertainty and doubt).
In 2022, CryptoLiteracy.org, a crypto education platform, tested 1,000 Americans, Brazilians and Mexicans on their knowledge of cryptocurrencies. 91% of pre-test participants failed. The observation is clear: most investors are speculating.
This alarming situation can be explained by two things: firstly, many investors only think about making money as fast as possible. And second, the cryptocurrency market is heavily influenced by social media and hype. Therefore, most investors are at risk of withdrawing at any time, which could have dire consequences on the market.
Hype: a double-edged sword for Crypto
One only has to take a look at social networks to realize that Bitcoin, Ethereum and other altcoins spark all passions. Certainly, this hype attracts investors from all over the world, but it also attracts bad actors who try to get rich by any means.
Contrary to popular belief, cryptography is legal in most countries, but not sufficiently regulated. So when you decide to invest in cryptocurrencies, you do so at your own risk.
Between 2014 and 2018, cryptocurrency education was not accessible to everyone and most investors had to spend hours looking for answers to their questions. Today, information is much more accessible and anyone can understand cryptocurrencies.
Want to know everything about cryptocurrencies? See our section “Learn” to access our latest cryptocurrency tutorials.
Crypto education is important to both the average investor and lawmakers. Without cryptocurrency education, regulators cannot separate fact from fake. And if governments continue to make decisions blindly, they risk damaging not only the cryptocurrency market and its various players, but also their own economic sovereignty.
Technological innovation also has a key role to play in crypto education. In the early 2000s, the digitization of businesses and commerce marked an entire generation. Everyone was trying to learn and benefit from what was considered a digital revolution.
However, the real digital revolution has just begun and technological innovations will allow us to take it to the next level and see cryptocurrency investing in a new light.
The importance of crypto education
Thousands of projects and crypto tokens are born every week. It is therefore more important than ever to do research before investing. According to the report Cryptocurrency investment literacy from Bybit and Toluna, the research methods required for a cryptocurrency investment are different from those of traditional investments.
According to data shared with BeInCrypto, of the 10,500 participants in the 19 markets studied, 1,748 present themselves as “crypto investors”. The main objective of the survey was to test the participants’ level of knowledge about investing in cryptocurrencies. The second objective was to know the research times and methods used by investors.
As the chart below shows, most Americans buy cryptocurrencies without doing enough research. Indeed, 64% of North Americans do less than two hours of research before investing in crypto projects.
In terms of age groups, the “boomers” [les personnes nées entre 1946 et 1964] they seem more cautious when it comes to investing in cryptocurrencies. In fact, baby boomers are 20% more knowledgeable than other generations, as they attach more importance to the technical aspects. According to the survey, 34% of baby boomers spend several days researching before investing.
Likewise, many participants made their cryptocurrency investment decisions based on factors such as the reputation of the founding team, as well as the names and credibility of those who support the project. Worse, only 9% to 35% of participants focused on the consent mechanism of the projects they invested in.
However, making a cryptocurrency investment decision based solely on the reputation of the project or its founder is a fatal mistake. FTX and its founder Sam Bankman-Fried are the perfect example. In fact, research and education underpin any cryptocurrency investment.
Moral of the story: Money is often said to be a form of power, but financial education is even more powerful than money.
Disclaimer
All information on our website is published in good faith and for general information purposes only. Any action you take based on information found on our website is entirely at your own risk.