Crypto investment research is lacking; before diving into the dir

Cryptocurrency investment literacy remains a top priority as the cryptocurrency market continues to mature. Many investors at this point of time only look at a few signals before plunging in blindly. This can cause permanent damage to their portfolio and livelihood.

Financial literacy is one of the most important life skills needed for a career. Despite its growth in adoption, the crypto landscape is filled with fear, uncertainty, and doubt along with disruption.

In 2022,, an industry initiative promoting broad consumer education of digital currencies, conducted a crypto-literacy quiz for 1,000 crypto-aware respondents in the US, Brazil and Mexico. 91% failed in the preliminary exam. This is a worrying figure, indicating that people are in this market for pure speculation.

This shows that many of these investors are either short term or social media hype is driving the market a lot. It also hints at potential future volatility as investors need to understand the true value proposition or cryptocurrencies before jumping in.

Understanding the Crypto Investing Hype

There is enough hype around bitcoin, ethereum and the crypto space as a whole, and promising entrepreneurs are building in this area to create solutions and products. However, bad actors are trying to profit from this hype, creating suspicious coins, NFTs, and other schemes.

There is also a common misconception about cryptocurrencies being illegal. Crypto is not illegal in most countries. However, it is also mostly unregulated. So, whenever we talk about the launch of something new in this sector, usually there is no regulatory framework to protect the unknowing investors.

Between 2014 and 2018, the only way for individuals to learn about the industry was to go through forums, write questions, and take people at their word. Gathering the information was not easy. Since then, the industry has become more structured, and more people and groups have increased their efforts to help new investors get on board.

The crypto space is booming

Apart from educating the common man, it is becoming increasingly important to educate the regulators. They’ve got a lot to chew on to define which parts work and which don’t. Regulators cannot and should not operate in a vacuum conducting armchair discussions about what is best for the public.

Technological innovation has a huge role to play in enabling crypto literacy. In the early 2000s, it was all about moving businesses online. It affected all generations. Everyone was organically motivated to learn and adapt to this shift from offline to online connectivity.

Rapid technological innovation in this new era of digital connectivity will allow us to take connectivity, including our finances, to the next level.

Importance of Financial Literacy

With thousands of cryptocurrency projects and associated coins or tokens in this space, it is more important than ever to do proper research before investing. According to the Crypto Investment Literacy Report by Bybit and Toluna, the methods of researching crypto investments are not the same as other traditional investments.

According to results shared with BeInCrypto, 1,748 of the 10,500 unique respondents across 19 markets identified as ‘crypto investors’. The main objective of the survey was to understand the cryptocurrency literacy. More specifically, how and how much time did respondents take to research before investing in cryptocurrency.

Crypto Investment Literacy Framework Source: Bybit
Crypto Investment Literacy Framework Source: Bybit

At the end of the results, the survey found that a majority of Americans buy cryptocurrencies blindly with barely any research. This is evident in the plot below. This shows that 64% of North Americans spend less than two hours researching a crypto project before investing.

Time Spent on Due Diligence Source: Bybit
Time Spent on Due Diligence Source: Bybit

A significant portion of investors said that they chose projects based on reputational factors such as the credibility of the founder, name and credibility of the backers. Others examine technical factors such as purpose and consensus algorithms.

Important factors to look at before investing (Top 3 factors from each category highlighted in red) Source: Bybit
Important factors to look at before investing (Top 3 factors from each category highlighted in red) Source: Bybit

However, reputational factors can be manipulated and misleading. An example of this was the billions of dollars invested in the FTX exchange and its associated FTT token. The collapse of the exchange caused a wave of financial losses for investors around the world. This shows the importance of DYOR or doing your own research.

With regard to age groups, ‘Boomers’ took a more cautious approach before putting any money into sports, thus resembling risk-averse investors. Boomers are, on average, 20% more secure than other generations because they place more emphasis on technological variables. 34% of Boomers spend the day researching a specific project.


All information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.

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