As Bitcoin trades near new highs, the level of financial literacy in the cryptocurrency community still leaves much to be desired, according to a new report.

The crypto community’s financial literacy rate is estimated at 25%, lagging well behind the financial literacy average in the United States by half, according to a new study by the crypto gaming startup PiP World.

Released on Nov. 26, the report analyzed a survey of 12,045 anonymous responses from crypto market participants submitted from March 2022 to October 2024 through the platform Coinfessions.

In the report, PiP World measured crypto financial literacy — an individual’s understanding and ability to make informed financial decisions — in percentages, referring to scores in “high” and “medium” levels of financial literacy.

Financial literacy in the crypto space is “dangerously low”

While the crypto community’s financial literacy rate is only down 8% from the global financial literacy average, such a rate is “dangerously low,” according to PiP World CEO Saad Naja.

“The findings of this report highlight an urgent and undeniable truth — financial literacy in the crypto space is dangerously low,” Naja said.

He added that too many traders are “navigating blind” in a rapidly evolving market, lacking the “foundational knowledge needed to succeed.”

Crypto literacy at ‘dangerously low’ levels, new report warns image 0

Crypto financial literacy rate versus regional financial literacy rates of adults in 2024. Source: PiP World

The study mentions that the emotional strain weighs heavily on the crypto community, which often self-confesses to being “reactive, impulsive and neurotic.”

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The study also suggests that seven out of 10 crypto investors highlighted losses, while 76% of respondents expressed regret about their investment decisions.

Whales and hodlers are among the most financially literate investors

According to the study, whales — large crypto investors accounting for 5% of the crypto segment mix — have demonstrated one of the highest crypto financial literacy rates of 96%.

Hodlers, or long-term cryptocurrency holders — estimated to account for 11% of the mix — are also associated with a significant financial literacy rate of 80%, the study suggests.

Crypto literacy at ‘dangerously low’ levels, new report warns image 1

Financial literacy rates by crypto community segments. Source: PiP World/Coinfessions

The report claims that speculative traders, which PiP World says to be the largest crypto investor segment with a 29% share, have a financial literacy of 64%.

On the other hand, day traders — those representing 6% of crypto investors in the report — have the lowest financial literacy rate, estimated at 27%. Pump and dumpers, which are estimated to account for a significant 18% share of crypto investors, are associated with a financial literacy rate of 45%.

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