A more "financially literate" user base could reduce cryptocurrencies’ wild market swings, some say.
A report released Nov. 26 by PiP World suggested that the crypto community’s financial literacy rate may be “dangerously low,” lagging well behind the financial literacy average in the United States.
Without basic financial knowledge, crypto users may be more likely to panic during a market downturn. Conversely, a financially literate investor base would help tamp down crypto’s chronic volatility, observers say.
“A lack of financial literacy can distort expectations and biases, causing individuals to misinterpret market signals, overestimate returns, and underestimate risks,” Santiago Carbo-Valverde, a professor of economics at the Universitat de València (Spain), who has studied the relationship between financial literacy and cryptocurrency ownership, told Cointelegraph.
