Canadian bitcoin owners have little financial literacy and are susceptible to high levels of financial risk, a new Bank of Canada research shows.
The Globe and Mail newspaper in Canada reported the study.
According to the research paper, despite their in-depth knowledge of blockchain technology, most Bitcoin investors struggle with fundamental financial literacy.
However, while being more aware than the average public, Canadians who are financially prudent are less likely to own the major cryptocurrency.
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‘Young And Educated’ Men Own Bitcoin
Between 2018 and 2020, central bank analysts determined that approximately 5% of Canadians owned bitcoin.
This percentage was “concentrated among young, educated men with a high household income and inadequate financial knowledge,” the researchers wrote in a publication summarizing the survey results released this week.
Around half of poll respondents who trade Bitcoin stated that having BTC – the world’s most valuable crypto currency – had impacted them negatively because of unfavorable occurrences.
Respondents explained how market collapses, scams, and data breaches resulted in losses rather than vice versa.
BTC total market cap at $806.44 billion on the daily chart | Source: TradingView.com
An Investment Instrument
The bulk of Bitcoin enthusiasts regard the digital commodity as an investment instrument, with only a narrow majority considering utilizing it primarily for payment purposes.
Between 2016 and 2020, the surveys were conducted annually to highlight the risks associated with investing in the volatile and weakly regulated asset sector.
Since 2016, the Bank of Canada has been monitoring cryptocurrency adoption to see how they are being used and whether they pose a threat to the existing money and payment systems.
However, while being more aware than the average public, Canadians who are smart with money are less likely to own the major cryptocurrency.
A Decent Percentage Use Bitcoin For Payments
Only 15% of respondents indicated that they own the asset used to make payments and pay their bills.
Nonetheless, some Bitcoin proponents feel that cryptocurrency could act as a catalyst for expanding financial education by compelling users to investigate the roots of money.
Across the country, the majority of adults in the United States have just a cursory grasp of cryptocurrency, but intend to use it as a primary source of retirement savings, a new multi-generational financial literacy research from Investopedia show.
Around 57% of American adults own cryptocurrencies, but only one in three claim to have advanced financial skills.
Around half of all respondents surveyed believe they have a firm grasp of the concepts of consumption, taxation, and saving. the Investopedia study reveals.
Featured image from Worth, chart from TradingView.com