Bank of Canada has tied cryptocurrency investment …

Bank of Canada has tied cryptocurrency investment …

Bank of Canada links cryptocurrency investments with low levels of financial literacy

The Bank of Canada found that most of the country’s residents have basic knowledge of finance and bitcoin, but only a few hold cryptocurrency. According to a survey on alternatives to traditional money, cited by Cointelegraph, financial literacy is positively correlated with awareness of cryptocurrencies, but negatively correlated with the desire to own them..

Financial literacy is understood by the Bank of Canada as having a basic knowledge of investing and retirement savings. 47% of the survey participants, conducted in August-September 2019, rated their level of financial literacy as high, 18% – as low. At the same time, respondents from the second group were twice as likely to invest in cryptocurrencies.

“93% of Canadians with a high level of financial literacy are knowledgeable about cryptocurrencies, while those with a low level are only 72%. In contrast, 8% of those with low levels of financial literacy reported holding cryptocurrencies. Among Canadians with a high level of financial literacy, this figure was 4%, ”the report says..

Overall, about 84% of those surveyed have at least heard of cryptocurrencies, and 5% hold bitcoin or altcoins. “Awareness and possession tend to be higher among young people, men with college degrees or high income,” says the regulator..

Bank of Canada tied investment in cryptocurrencies ...

In February 2020, ING came to similar conclusions, which in 2018 conducted a survey of residents of 15 countries, including the US, Australia, the UK and the EU: “Our estimates show that people with higher levels of financial literacy are less likely to own cryptocurrencies. They are also less likely to purchase them in the future. A significant portion of the cryptocurrency market is represented by inexperienced investors with lower financial literacy skills. These investors are more likely to overestimate the opportunities for making money on cryptocurrencies and underestimate their risks “.

At the same time, another survey showed that many investors shy away from cryptocurrencies, as they are poorly versed in them. In 2018, 44% of participants in a survey by the investment platform eToro cited this as a reason for not trading cryptocurrencies. In 2019, Grayscale conducted its own research, which showed that American investors would be more willing to buy bitcoin if they had access to more educational resources..

Bank of Canada has tied cryptocurrency investment ...

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