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98% of people failed the basic crypto literacy test: RPT

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CoinDesk Learn Editor Ollie Leech joins Yahoo Finance to discuss cryptocurrency literacy month.

Video transcript

ADAM SHAPIRO: Let's go into our crypto corner, because it is Crypto Literacy month. Ollie Leech from CoinDesk-- he's the Learn Editor-- is going to learn us something. I think a lot of people, when you look at what happened with that Squid scam, have a great deal to learn. And it's good to have you here, Ollie. What would you want us to consider as we try to get more knowledgeable about crypto, whether it be Bitcoin or Squid scam?

OLLIE LEECH: Hey, Adam. Yeah, thanks. So, I mean, anyone who's looking at the Crypto Literacy Month results-- so just quickly on what that is. Coinme put that together with in partnership with CoinDesk, Digital Currency Group, and Pantera. And the idea is, we're basically trying to understand what the level of understanding of cryptocurrency is across the nation, across the world, really. But we started with the US, Brazil, and Mexico.

And the findings were pretty worrying, actually. 98% of people failed the basic crypto literacy test. And people at home, if you want to give it a go, cryptoliteracy.org is the website to go to. 9 out of 10 people couldn't accurately tell which what Bitcoin's current supply-- or total supply is, sorry. They didn't realize it was 21 million coins.

So what does that tell us? And actually, using Squid as a good example, it tells us people are in this market for pure speculation. They're not really looking at the assets that they're investing in, at least not from a technical perspective. It tells us they're really either in it for short term. Perhaps even the social media hype is driving a lot of the market and a lot of the reasons why people are getting into these currencies in the first place.

And like I said, Squid is a perfect example. It had this huge run up without people realizing you couldn't even cash out of the asset. And obviously, it's just completely disappeared. It's now been brought down.

So it's a really interesting thing. They're looking to do it yearly, now, I believe. And it's just giving us a really good understanding of what the market is right now and what the level of education and the needs are. And it's clearly pointed to us, we have a long way to go. We really need to work on that. I think CoinDesk is in a great position to push forward with the education. And that's my job, and we're going to hopefully bring those numbers down a little bit and improve that education across the board. But yeah, it's a really interesting thing.

- Ollie, what do you think this tells us about potential future volatility? Because if investors are just jumping in, they don't really understand what they're buying or exactly how crypto-- more specifically, Bitcoin in some cases-- exactly work, is that a very worrisome sign here for investors and maybe others, specifically institutional investors who are invested in this space?

OLLIE LEECH: Yeah, exactly. It just kind of goes to show that they're investing because either they've heard about it on social media, or they've been recommended it. They've not actually looked into the value propositions themselves.

And in terms of volatility, this shows, there's going to be a lot more short-term volatility until people realize the value propositions of these assets, for example, Bitcoin and other stronger assets like Ethereum and onwards. These assets are very good long holds. I believe that, and I think a lot of people would agree.

But people are just so keen to try and make these quick, fast multipliers. And they're looking down the list, right down to the bottom in the back end of coin market cap and just gambling with these coins that-- they've got a lot of hype. They're tapping into current trends like the "Squid Game," tapping into that Netflix special. And they're not really buying with any intention and understanding of what they're buying.

ADAM SHAPIRO: When you say that what you've learned from the results of the survey, that this is really speculative and most people not really investing because they understand the asset, were you surprised by that? Isn't that what this is all about to begin with?

OLLIE LEECH: I think, for me, I was surprised at the sheer number. I mean, 98% failed the test. at CoinDesk, we're heavily involved in working with that survey, putting the questions together. And a lot of those questions were what we assumed to be sort of common knowledge that we thought a lot of people would be able to understand and to get right. And the results show that they just didn't get those right at all.

So yeah, I was surprised at the lack of education or the lack of understanding across the board in the US, Brazil, and Mexico. I'll be interested to see, when we push the survey further out into different countries, what their understanding of the space will be. But yeah, definitely surprised. We've got a lot more to do than I think we thought we had to do.

ADAM SHAPIRO: Ollie Leech, we appreciate your joining us.

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