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75% Higher Crypto Ownership Linked to Financial Literacy Bias: Study Finds

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75% Higher Crypto Ownership Linked to Financial Literacy Bias: Study Finds

Cryptocurrencies have transformed the
financial landscape, captivating tech enthusiasts, investors, and regulators
worldwide. However, as digital assets gain prominence, critical questions arise
about the role of financial literacy and cognitive biases in shaping investment
behaviours.

Empirical evidence underscores that
financial literacy significantly influences financial stability by enhancing
individual decision-making. People with higher financial literacy make prudent
choices, such as budgeting effectively, saving for emergencies, and
understanding borrowing costs.

Conversely, low financial literacy often leads
to poor decisions, over-indebtedness, and susceptibility to distorted
expectations, amplifying systemic risks.

Why does financial literacy play a
pivotal role in the cryptocurrency ecosystem? The inherent complexity of
digital assets like cryptocurrencies necessitates accurate financial knowledge
to navigate their risks. Understanding blockchain technology, digital wallets,
and trading platforms—all critical components of cryptocurrency
investment—requires a level of digital and financial literacy that many
investors lack.

Cryptocurrencies themselves are diverse, ranging from
established names like Bitcoin and Ethereum to speculative altcoins. Without
the ability to critically assess technology stacks and market trends, investors
may fall prey to speculative bubbles or projects with little intrinsic value.

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A
lack of financial literacy exacerbates these challenges, making it difficult to
comprehend the potential consequences of market fluctuations, thereby
increasing vulnerability to shocks. The connection between financial
literacy and cryptocurrency ownership is particularly significant given the
complexity of these assets compared to traditional financial instruments and
the risks they pose to financial stability.

Study Links Overconfidence to Crypto
Investments

A recent study, Cryptocurrency
Ownership and Cognitive Biases in Perceived Financial Literacy, conducted in
Spain by Santiago Carbó, Pedro J. Cuadros, and Francisco Rodríguez and funded
by Funcas, sheds light on this issue. The research investigates how financial
literacy bias—the gap between perceived and actual financial knowledge—affects
cryptocurrency ownership.

Based on a survey of over 2,000 participants, the
study identifies financial literacy bias as a critical determinant of
cryptocurrency ownership, even after controlling for variables such as age,
income, and digital activity.

Machine Learning Highlights Crypto
Ownership Factors

Using advanced machine learning
techniques, the study reveals that individuals who overestimate their financial
knowledge are significantly more likely to invest in cryptocurrencies.
Specifically, those who overestimated their financial literacy were 75% more
likely to hold digital assets compared to those with accurate self-assessments.
For every unit increase in financial literacy bias, the odds of owning
cryptocurrencies rose by approximately 4.37 times.

Why does this happen? Individuals who
overestimate their financial literacy may feel overly confident in facing the
complexities of the cryptocurrency market. Cognitive biases, such as
confirmation bias, can further reinforce this confidence by leading individuals
to focus on information that validates their investment choices while
disregarding evidence of potential risks. Addressing these biases is essential
for fostering more rational and informed investment behaviour.

Cognitive Biases Fuel Crypto
Speculative Bubbles

Interestingly, the study also found
that when financial literacy scores were adjusted to account for bias, the
likelihood of cryptocurrency ownership decreased by 25.4%. This highlights the
importance of accurate self-assessment in mitigating risky investment
behaviours.

While cryptocurrency adoption is not
inherently harmful, it can pose systemic risks when driven by misinformation or
cognitive biases. Cryptocurrencies often attract individuals seeking quick
returns, potentially fueling speculative bubbles and increasing market
volatility. Such conditions also create opportunities for fraud and scams,
further destabilising the financial ecosystem.

Promoting Financial Education to
Mitigate Risks

For policymakers and regulators,
these findings emphasize the urgency of promoting financial education.
Initiatives that address cognitive biases and enhance objective financial
literacy can help mitigate risks and encourage responsible investment
behaviour. Regulators and industry leaders should collaborate to ensure that
investors have access to reliable information and safeguards against misleading
claims.

By fostering a culture of financial literacy and addressing cognitive
biases, we can help ensure that the cryptocurrency revolution is both inclusive
and sustainable. Whether as investors, educators, or policymakers, recognizing
the interplay between knowledge, perception, and behaviour is key to succeeding
in this dynamic financial landscape.

Francisco Rodríguez also contributed to this article.

Cryptocurrencies have transformed the
financial landscape, captivating tech enthusiasts, investors, and regulators
worldwide. However, as digital assets gain prominence, critical questions arise
about the role of financial literacy and cognitive biases in shaping investment
behaviours.

Advertisement

Empirical evidence underscores that
financial literacy significantly influences financial stability by enhancing
individual decision-making. People with higher financial literacy make prudent
choices, such as budgeting effectively, saving for emergencies, and
understanding borrowing costs.

Conversely, low financial literacy often leads
to poor decisions, over-indebtedness, and susceptibility to distorted
expectations, amplifying systemic risks.

Why does financial literacy play a
pivotal role in the cryptocurrency ecosystem? The inherent complexity of
digital assets like cryptocurrencies necessitates accurate financial knowledge
to navigate their risks. Understanding blockchain technology, digital wallets,
and trading platforms—all critical components of cryptocurrency
investment—requires a level of digital and financial literacy that many
investors lack.

Cryptocurrencies themselves are diverse, ranging from
established names like Bitcoin and Ethereum to speculative altcoins. Without
the ability to critically assess technology stacks and market trends, investors
may fall prey to speculative bubbles or projects with little intrinsic value.

A
lack of financial literacy exacerbates these challenges, making it difficult to
comprehend the potential consequences of market fluctuations, thereby
increasing vulnerability to shocks. The connection between financial
literacy and cryptocurrency ownership is particularly significant given the
complexity of these assets compared to traditional financial instruments and
the risks they pose to financial stability.

Advertisement

Study Links Overconfidence to Crypto
Investments

A recent study, Cryptocurrency
Ownership and Cognitive Biases in Perceived Financial Literacy, conducted in
Spain by Santiago Carbó, Pedro J. Cuadros, and Francisco Rodríguez and funded
by Funcas, sheds light on this issue. The research investigates how financial
literacy bias—the gap between perceived and actual financial knowledge—affects
cryptocurrency ownership.

Based on a survey of over 2,000 participants, the
study identifies financial literacy bias as a critical determinant of
cryptocurrency ownership, even after controlling for variables such as age,
income, and digital activity.

Machine Learning Highlights Crypto
Ownership Factors

Using advanced machine learning
techniques, the study reveals that individuals who overestimate their financial
knowledge are significantly more likely to invest in cryptocurrencies.
Specifically, those who overestimated their financial literacy were 75% more
likely to hold digital assets compared to those with accurate self-assessments.
For every unit increase in financial literacy bias, the odds of owning
cryptocurrencies rose by approximately 4.37 times.

Why does this happen? Individuals who
overestimate their financial literacy may feel overly confident in facing the
complexities of the cryptocurrency market. Cognitive biases, such as
confirmation bias, can further reinforce this confidence by leading individuals
to focus on information that validates their investment choices while
disregarding evidence of potential risks. Addressing these biases is essential
for fostering more rational and informed investment behaviour.

Cognitive Biases Fuel Crypto
Speculative Bubbles

Interestingly, the study also found
that when financial literacy scores were adjusted to account for bias, the
likelihood of cryptocurrency ownership decreased by 25.4%. This highlights the
importance of accurate self-assessment in mitigating risky investment
behaviours.

While cryptocurrency adoption is not
inherently harmful, it can pose systemic risks when driven by misinformation or
cognitive biases. Cryptocurrencies often attract individuals seeking quick
returns, potentially fueling speculative bubbles and increasing market
volatility. Such conditions also create opportunities for fraud and scams,
further destabilising the financial ecosystem.

Promoting Financial Education to
Mitigate Risks

For policymakers and regulators,
these findings emphasize the urgency of promoting financial education.
Initiatives that address cognitive biases and enhance objective financial
literacy can help mitigate risks and encourage responsible investment
behaviour. Regulators and industry leaders should collaborate to ensure that
investors have access to reliable information and safeguards against misleading
claims.

By fostering a culture of financial literacy and addressing cognitive
biases, we can help ensure that the cryptocurrency revolution is both inclusive
and sustainable. Whether as investors, educators, or policymakers, recognizing
the interplay between knowledge, perception, and behaviour is key to succeeding
in this dynamic financial landscape.

Francisco Rodríguez also contributed to this article.

Advertisement

Crypto

Upcoming ‘Bitcoin’ Movie With Casey Affleck, Gal Gadot Probes Satoshi’s Identity

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Upcoming ‘Bitcoin’ Movie With Casey Affleck, Gal Gadot Probes Satoshi’s Identity

Key Takeaways:

  • New Bitcoin film stars Casey Affleck and Gal Gadot, probing Satoshi Nakamoto’s identity.
  • Craig Wright’s disputed role deepens divisions across Bitcoin developers and market participants.
  • Industry reaction may polarize further as the film revives debate over Bitcoin’s origins.

Bitcoin Creator Dispute Moves Into Mainstream Film

The mystery surrounding Bitcoin’s creator is moving into the mainstream as “ Bitcoin,” previously referred to in online reports as “ Bitcoin: Killing Satoshi,” adapts one of crypto’s most contested debates to the screen. Ahead of the Cannes market, Patrick Wachsberger’s 193, a film sales and production company, launched international sales on the project, signaling a push to global buyers. Around the same time, Acme AI & FX, the production company behind the film, confirmed it had wrapped production on the Doug Liman-directed feature. The movie, described as the “first fully-generated, studio-quality AI feature film,” centers on the unresolved question of who created Bitcoin and why that issue continues to influence industry discussions and market perception.

The story follows Charlotte “Lotte” Miller, a war correspondent played by Gal Gadot, who is recruited by blockchain investor Calvin Ayre, portrayed by Pete Davidson, to write an investigative report on Australian computer scientist Craig Wright. Casey Affleck plays Wright, with Isla Fisher also appearing in the cast. The film was written by Nick Schenk and produced by Ryan Kavanaugh and Lawrence Grey, with production beginning at the end of February. The synopsis described the film:

“A high-stakes conspiracy thriller that asks the question no one in power wants answered.”

A longer description presents the movie as the story of one man’s effort to prove he created Bitcoin, a claim that allegedly puts his life in danger and sparks a global controversy involving tech billionaires, world leaders, and the future of the financial system.

Craig Wright Claims Renew Industry Polarization

From a Bitcoin industry standpoint, the film enters a highly disputed issue. Wright’s claim that he is Satoshi Nakamoto has been challenged for years by developers, researchers, and other participants in the sector, many of whom point to the lack of accepted cryptographic proof. A 2024 U.K. court ruling also rejected his claim, adding legal weight to that skepticism. Within parts of the BTC community, Wright is widely referred to as “Faketoshi,” and critics have accused him of fraud tied to those assertions.

The production approach has also drawn attention, as the “fully-generated” label refers largely to AI-built environments and visuals, while actors perform traditionally with digital settings added in post-production. At the same time, the subject matter is likely to drive industry reaction, as many bitcoiners view the claims as legally and technically discredited rather than unresolved.

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That divide helps explain why the film is likely to provoke a polarized response across crypto. Many will see it as reopening a debate already settled by legal findings and technical evidence, while others may view it as an attempt to revisit unanswered questions around motive and power. The synopsis stated:

“All this leads Lotte, and the audience, to the central question — If Craig Wright didn’t invent Bitcoin, why is a coalition controlling trillions in global wealth spending hundreds of millions and risking everything to destroy him?”

“This is an exciting and gripping story, set in the mysterious and high-stakes real world of crypto,” Wachsberger told Deadline. The positioning underscores how the film is being framed, not just as a thriller, but as a mainstream take on one of bitcoin’s most contested narratives, where claims have long been weighed against verifiable proof.

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Crypto

1 Cryptocurrency to Buy While It’s Under $80,000

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1 Cryptocurrency to Buy While It’s Under ,000

Key Points

  • Investor pessimism toward the digital asset market has driven this top cryptocurrency 40% off its record high from last October.

  • History reveals that fiat currencies often end in collapse, paving the way for this innovative monetary asset to find greater adoption across the global economy.

  • Besides being electronic, scarcity and neutrality support this cryptocurrency’s value proposition.

It hasn’t been an enjoyable time if you have money tied up in cryptocurrencies. After the market’s valuation peaked at $4.4 trillion in October, we’ve witnessed a downward spiral that has resulted in that figure plummeting to $2.6 trillion today (as of April 17).

On the other hand, the S&P 500 index climbed 5% during the same time. It’s completely understandable if people want to forget about digital assets. They aren’t the easiest to hold; it’s hard to handle the volatility.

Will AI create the world’s first trillionaire? Our team just released a report on the one little-known company, called an “Indispensable Monopoly” providing the critical technology Nvidia and Intel both need. Continue »

However, a monster opportunity is staring investors in the face. Here’s the cryptocurrency to buy right now, especially since it trades under $80,000.

Image source: Getty Images.

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It usually doesn’t end well for fiat currencies

It’s time to shine the spotlight on Bitcoin(CRYPTO: BTC), the world’s first and most valuable cryptocurrency, with a market cap of $1.5 trillion. Bitcoin is a decentralized monetary network that was built to allow anyone in the world to transfer value to anyone else anywhere in the world without the use of an intermediary. It was a technological breakthrough at the time. And it still is today.

To understand the enormous importance of a completely novel monetary network to emerge, one that’s digital, immutable, and not controlled by anyone, it requires looking at the past. Fiat currencies, like the U.S. dollar, have a troubled history.

Since President Richard Nixon ended the convertibility of U.S. dollars to gold in 1971, the world economy has operated on government-backed, or fiat, currencies. The U.S. dollar has been the global reserve currency.

But the track record is impossible to ignore. Fiat currencies often end in collapse. Before the U.S. dollar’s current reign, it was the British Pound sterling. Over time, inflation decreases purchasing power, sometimes rapidly.

Is the writing on the wall for the U.S. dollar? Persistent fiscal deficits in the U.S., an ever-expanding debt burden that’s nearing $40 trillion, loss of public confidence and trust, and political instability are all clear signs that cracks in the system are forming.

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While unsustainable things can go on for much longer than people anticipate, perhaps it’s only a matter of time before the U.S. dollar’s dominance comes to an end. And Bitcoin appears well-positioned to be a winner from this development.

The history lesson naturally leads to Bitcoin

After gaining more knowledge about the history of fiat currencies, investors will figure out the best ways to allocate capital to maintain and grow their purchasing power over the next decade. High-quality stocks, particularly in businesses that possess pricing power, present one idea. Real estate and commodities are also interesting if you have expertise in these areas.

Gold also comes to mind. It might not be a coincidence that the precious metal’s price doubled in the past two years. Those in charge of large pools of capital might be considering some of the variables that I just discussed, leading them to direct money toward an asset that has been viewed as a top store of value for millennia.

I believe, however, that Bitcoin is the best bet if you think there’s even a tiny chance that the U.S. dollar will collapse as its predecessors did.

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Bitcoin is superior to gold, in my opinion. It’s purely digital, while also being divisible, allowing people to transact with it. It’s borderless and portable. And it’s finite, with a hard supply cap of 21 million units. It makes sense that a neutral monetary asset would succeed, or at least rise alongside, the U.S. dollar’s run. Individuals, corporations, financial institutions, and governments should gravitate toward the supreme cryptocurrency.

And that supports a much higher price a decade from now, with the upside even bigger on a longer time horizon. With Bitcoin trading 40% off its peak, at a price that’s under $80,000 right now, investors have the opportunity to buy what could end up being the dominant financial instrument in the economy one day.

Should you buy stock in Bitcoin right now?

Before you buy stock in Bitcoin, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Bitcoin wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation, you’d have $524,786!* Or when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $1,236,406!*

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*Stock Advisor returns as of April 19, 2026.

Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.

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Arthur Hayes Warns Bitcoin May Stall Until Liquidity Returns

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Arthur Hayes Warns Bitcoin May Stall Until Liquidity Returns

Key Takeaways:

  • Arthur Hayes ties bitcoin’s outlook to global liquidity, with upside dependent on policy-driven liquidity.
  • Geopolitics create a bearish setup as war risk, deleveraging, and AI-driven stress weigh on markets.
  • Liquidity injections could lift bitcoin once credit stress forces intervention.

Bitcoin Outlook Hinges on Liquidity

Arthur Hayes’ latest market note, titled “No Trade Zone,” signals that bitcoin’s outlook is increasingly tied to global liquidity conditions rather than traditional macro indicators. On April 15, the Bitmex co-founder and Maelstrom CIO outlined a cautious stance, citing geopolitical tensions and artificial intelligence-driven economic risks as key constraints. The essay presents BTC as vulnerable in the short term but positioned to respond to future monetary expansion.

Hayes centered his outlook on monetary conditions rather than conventional valuation models. He asked, “Do you believe the quantity or the price of money is more important when valuing bitcoin?” He then answered with a direct thesis:

“I believe the quantity of money determines the price of bitcoin, not its price.”

That view underpins his broader market framework, which expects bitcoin to struggle during periods of forced deleveraging, then strengthen when policymakers expand credit. He tied that dynamic to several geopolitical outcomes involving the Strait of Hormuz, as well as to a domestic economic slowdown driven by job losses among white-collar workers. In Hayes’ view, those pressures could hit credit quality, weigh on banks, and delay any durable crypto rally until authorities supply fresh liquidity to stabilize the system.

War Risk and Credit Stress Threaten Rally

That caution appears clearly in one of the essay’s most specific forecasts. “ Bitcoin might bounce a bit after the situation reverts to the pre-war status quo,” Hayes wrote. “However, the AI agentic deflation bomb still ticks below the surface. Until the Fed provides the liquidity needed to plug the black hole in banks’ balance sheets caused by consumer credit defaults, bitcoin will not meaningfully rise.” He further shared:

“That’s not to say it couldn’t spike to $80,000 to $90,000, but for me putting new units of fiat at risk requires an all-clear from the Fed.”

The statement shows that he still sees upside potential, but not before broader financial stress is addressed.

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Hayes also warned that market stress could produce another sharp bitcoin selloff before any recovery takes hold. “As investors de-risk their portfolios because of higher volatility and lower prices, investors sell bitcoin to meet margin calls,” he described, adding: “Only when things get bad enough will bitcoin rise, as expectations of a bailout become the consensus.” In the most extreme scenario, even a liquidity-fueled rally may not last. As Hayes put it: “The rally in bitcoin, inspired by money printing, might be short-lived because the destruction of the Iranian state materially raises the prospect of WW3.” Taken together, the essay presents a conditional forecast: near-term volatility remains high, while any lasting upside still depends on crisis-era money creation.

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