Educating Retail Investors On Crypto Investment Literacy Is Essential To The Industry’s Long-Term Growth
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Introduction
In 2020, the crypto industry saw a bullish climate, attracting many investors into the Web3 and crypto world. As such, the current bear market might be a first for many. There is no doubt that the crypto winter is currently in full swing. The market capitalization of cryptocurrencies has fallen from $3 trillion in November 2021 to less than $1 trillion today. However, it is important for investors to note that the crypto market, just like the market for any other traditional assets, has cycles where unpredictable volatilities and fluctuations in asset prices are inevitable.
The speed and magnitude of price drawdowns in the current market have caught many retail investors off guard, which in turn revealed the need and importance of crypto investment literacy and how it could help investors manage their portfolios in such times. Unfortunately, compared to institutional investors, most retail investors have inadequate crypto investment literacy, leaving them underprepared in the face of market volatility, thus suffering unintended losses.
As such, Bybit sees the necessity to dive into the user journey of retail investors and their crypto investment literacy. In the process, we will introduce the crypto industry’s first crypto investment literacy framework and highlight key findings based on a survey to understand current crypto investors’ investment literacy. We also hope to equip all existing and prospective crypto investors with adequate and appropriate investment literacy.
We strongly believe educating retail investors on crypto investment literacy is essential to the industry’s long-term growth. Journey with us as we present you with findings on current perceptions and behaviors in the crypto market and a proper crypto investment checklist.
Methodology
In November 2022, Bybit and Toluna embarked on a journey to better understand the consumer journey of crypto investors. As part of the process, 10,500 unique respondents in 19 markets, with 1,748 identified as ‘crypto investors’ were surveyed.
To ensure representativeness across each market, we set a quota per national representation among the following categories: Ages from 18 - 64 years, SES, and Urban vs. Rural regions.
The purpose of our study is to:
• Provide a global view on how crypto investors perceive centralized exchanges, KYC, and whether the pursuit of decentralization negates their trust in centralized exchanges.
• Provide an in-depth overview of current retail investors’ crypto investment literacy and whether there are any significant differences amongst countries, markets, and generations on
A) crypto investors’ due diligence behavior;
B) crypto investors’ investment ambition and behavior.
Crypto Investment Literacy Framework
Before diving into useful practices one can take to enhance their crypto investment literacy, one should first understand the common components of an investment journey and how they are important.
For typical crypto investors, there are three main milestones. First, their decision to invest in crypto, second, choosing a provider or project, and last but not least, how they manage their portfolios.
Thus, we have created a Crypto Investment Literacy Framework to flesh out what each milestone entails, why it is important, and what we can learn to better our own investment literacy.
This article is part of the report
