“In particular, Canadians who were young, male, employed, had a college degree, high household income, and relatively low financial literacy, were more likely to own Bitcoin.”
A Bank of Canada study has found that Bitcoiners are on average less financially literate than non-BTC holders are.
The study used data from four years of annual surveys from 2016 to 2020, and sample sizes range from 1,987 to 3,893 respondents.
The Bank of Canada’s full study is titled “Bitcoin Awareness, Ownership and Use: 2016-20” and was released on April 19. A key conclusion of the study was that:
“Bitcoin owners showed greater knowledge about the Bitcoin network than non-owners, although they scored lower on questions assessing financial knowledge.”
However, the financial literacy test found its bases on just three multiple-choice questions focused on interest rates, inflation, and understanding stocks and mutual funds. The three questions on Bitcoin focused on supply, the digital ledger, and whether or not the network is government-backed.
Given the limited number of questions, the idea that they can accurately measure someone’s financial knowledge is debatable. On the other hand, the questions are quite easy.
Researchers from the Bank of Canada highlighted that the “interplay between financial literacy and crypto-asset market participation” is important to explore, as there are many risks associated with the sector, which users can avoid through further education.
Bitcoiners
The data reveals that, over the four years, the average number of Bitcoin users fell into the demographic of young men between the ages of 18 and 34, with men accounting for at least twice as many as women each year. The gender gap has been a longstanding and widely reported topic in the short history of the cryptocurrency space.
“In general, the marginal effects are consistent with the descriptive results already discussed. We find that the probability of owning Bitcoin decreases with being female, older, and unemployed, but increases with education,” the report says.
As for a specific type of Bitcoin holder, the report suggests that educated young men who scored low in financial literacy but earned more than $70,000 were the most typical type:
“In particular, Canadians who were young, male, employed, had a college degree, high household income, and relatively low financial literacy were more likely to own Bitcoin.”
Non-Bitcoiners
At the other end of the spectrum, those who scored high on financial literacy were “more likely to be aware of Bitcoin, but less likely to own it.”
The reasons offered in the study for not owning Bitcoin that was most surveyed were not necessarily anti-Bitcoin; lack of understanding and satisfactory current payment methods were the main responses.
After those two reasons, the next highest reason each year was that respondents do not “trust a private currency that is not backed by a government.”
“We found that between 2018 and 2020, the level of Bitcoin awareness and ownership among Canadians remained stable: almost 90% of the population knew about Bitcoin, while only 5% owned it.”
Cointelegraph reported an individual survey from this study dubbed the “Cash Alternative Survey”, which suggested that Canadians with a lower level of financial understanding might be twice as likely to invest in cryptocurrencies.
By Audy Castaneda
