The Interdependence of Financial Literacy and Crypto Literacy

Abstract

As cryptocurrencies become prevalent in investor portfolios, we examine whether a deeper knowledge of digital assets is connected to an understanding of broader financial concepts. We find a positive relationship between cryptocurrency (crypto) literacy and financial literacy, suggesting that a higher understanding of cryptocurrencies may lead to better financial decision-making. Our research reveals that individuals with higher levels of subjective crypto literacy are more likely to seek professional guidance. We also discover that individuals with higher subjective crypto literacy demonstrate a higher risk-taking propensity and are more optimistic about the future price of bitcoin.

Keywords: financial literacy, crypto literacy, Risk, financial advice