The Importance Of Financial Literacy For Cryptocurrency Investors

Abstract

Cryptocurrencies have emerged as a potentially disruptive element within the digital economy, changing the way in which various financial operations were previously perceived and thus experiencing significant growth in terms of adoption, usage, market capitalisation, valuation, trading and diversification. In light of this new scenario, this article explores and provides evidence on the relationship between cryptocurrencies and social networks through the use of digital social listening tools, exploring data retrieved from the most prominent social networks, as well as websites, forums and blogs, thus offering a quantitative analysis to focus on the urgent need to provide an adequate level of financial education in the digital economy, so that the cryptocurrency user or investor is aware of the existing risks associated with cryptocurrencies, especially among the young population, without underestimating the influence that social networks have had and continue to have on the perception and acceptance of digital currencies, and even on their popularity.

As a result of this, and the subsequent popularisation of cryptocurrencies on social media platforms, the reach and influence of social media would have determined the public's perception of these digital assets, thus influencing the sentiment that social media users and internet users have generated towards them. In fact, social media platforms have become a powerful catalyst for the transmission of information, news and opinions about cryptocurrencies, serving as unregulated digital forums where users share opinions, analyses and predictions. This would pose a dilemma in terms of determining what information is reliable, which, coupled with the lack of regulated oversight of cryptocurrencies, would require providing users with the necessary knowledge to mitigate risks and promote informed decision-making

Therefore, the aim of this article is to provide evidence of how social networks act as an indispensable channel in the cryptocurrency phenomenon and its public perception, analysing the context in which it occurs, as well as the patterns followed and the most commonly used channels, which would make it necessary to evaluate the role that accurate and accessible financial education has to play, with the clear aim of reducing the risks inherent to digital currencies