Hanna Tereshchenko
https://orcid.org/0000-0002-9458-2843
Tetiana Dmytrenko
https://orcid.org/0000-0002-2632-2986
IMPROVING INVESTMENT LITERACY IN THE CRYPTO MARKET
Full text (pdf)
Language: Ukrainian
Abstract. The article emphasises the importance of developing investment knowledge and skills among participants in the cryptocurrency market. The authors highlight the rapid growth in the popularity of cryptocurrencies and the financial risks associated with users’ lack of awareness. Key aspects of investment literacy necessary for effective work in the crypto market are analysed, including understanding the nature of cryptocurrencies, basic trading mechanisms, risk management and security. The authors conducted a thorough review of the literature related to investment, financial, and digital literacy in the crypto market. The analysis revealed that in Ukraine, scientific research on the development of the crypto market is fragmented, and the issue of investment literacy in the crypto market is not yet addressed by domestic researchers. However, considering the rapid development of the crypto market and the rise of fraudulent schemes within it, research in this area is becoming increasingly relevant. The article analyses well-known cases of fraud in the crypto market and the level of investor losses. It provides examples of uncovering financial fraud involving cryptocurrencies in the Republic of Kazakhstan, an investigation conducted in July 2023 by experts from the NGO “Ukrainian Modern Digital Science” (UMDS). During the investigation, UMDS experts (specialists from Global Ledger) established the chronology, principles of operation of the financial pyramid, and the methods of cash withdrawal during the Ponzi scheme. Particular attention is given to the need to study the technical and fundamental aspects of cryptocurrency assets, as well as to develop critical thinking skills for evaluating potential investments. The article also discusses popular fraudulent schemes in the crypto market. The authors conclude that educational programmes and the increased availability of learning materials are essential to minimise risks for newcomers. Regulatory measures aimed at protecting investors and creating transparent rules in the cryptocurrency market are also crucial. Thus, the article highlights the key role of investment literacy in shaping the stable financial behaviour of crypto market participants and enhancing their ability to succeed in rapidly changing market conditions.
Keywords: financial literacy, investment literacy, digital literacy, alternative finance, virtual assets, crypto market, cryptocurrency.
https://doi.org/10.32987/2617-8532-2024-5-55-65
Keywords: financial literacy, investment literacy, digital literacy, alternative finance, virtual assets, crypto market, cryptocurrency.
https://doi.org/10.32987/2617-8532-2024-5-55-65
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3. Semenenko, O. (2022). Cryptocurrencies and fraud. Retrieved from https://finance.ua/ua/saving/shahrajstvo-z-kryptovalutamy [in Ukrainian].
4. Domina, O. (2022). Cryptocurrency fraud: 4 new schemes that emerged during the war. Retrieved from https://minfin.com.ua/ua/2022/03/29/82848509/ [in Ukrainian].
5. Zhao, H., & Zhang, L. (2021). Financial literacy or investment experience: which is more influential in cryptocurrency investment? International Journal of Bank Marketing, 39(7), 1208-1226. DOI: https://doi.org/10.1108/IJBM-11-2020-0552.
6. Global Ledger Protocol. (2021). Global Ledger Protocol: Digital assets tracking and AML Compliance. Retrieved from https://glprotocol.com/.
7. Colombo, J. A., & Yarovaya, L. (2024). Are crypto and non-crypto investors alike? Evidence from a comprehensive survey in Brazil. Technology in Society, 76, 102468. DOI: https://doi.org/10.1016/j.techsoc.2024.102468.
8. Cristofaro, M., Giardino, P. L., Misra, S., Pham, Q. T., & Hiep Phan, H. (2023). Behavior or culture? Investigating the use of cryptocurrencies for electronic commerce across the USA and China. Management Research Review, 46(3), 340-368. DOI: https://doi.org/10.1108/MRR-06-2021-0493.
9. Hayashi, F., & Routh, A. (2024). Financial Literacy, Risk Tolerance, and Cryptocurrency Ownership in the United States. Federal Reserve Bank of Kansas City, Research Working Paper, 24-03. DOI: http://doi.org/10.18651/RWP2024-03.
10. Balutel, D., Engert, W., Henry, C., Huynh, K. P., Rusu, D., & Voia, M. C. (2023). Crypto and financial literacy of cryptoasset owners versus non-owners: The role of gender differences. Journal of Financial Literacy and Wellbeing, 1(3), 514-540. DOI: https://doi.org/10.1017/flw.2024.2.
11. Cascavilla, A. (2024). Between money and speculative asset: The role of financial literacy on the perception towards Bitcoin in Italy. Journal of Economic Psychology, 102, 102716. DOI: https://doi.org/10.1016/j.joep.2024.102716.
12. Public organization “Ukrainian Modern Digital Science”. (n. d.). Retrieved from https://umdigital.science/.
13. Dmytrenko, T. (2024). How Cryptocurrencies are Used in Ponzi Schemes and How to Combat Them: The Case of Kazakhstan. Retrieved from https://incrypted.com/ua/jak-kryptovaljuty-vykorystovujut-u-shemah-pontsi/ [in Ukrainian].
14. Federal Trade Commission. (n. d.). Retrieved from https://www.ftc.gov/.
15. Caporal, J. (2024). Crypto and Investment Scam Statistics for 2024: Investment scams are costing consumers millions, and cryptocurrency is a top payment method. The Motley Fool. Retrieved from https://www.fool.com/research/crypto-investment-scams/.
16. Baranivska, T. (2024). Cryptocurrency fraud: Kyiv Prosecutor’s Office suspects 10 Ukrainians. Retrieved from https://suspilne.media/kyiv/811865-sahrajstvo-iz-kriptovalutou-kiivska-prokuratura-pidozrue-10-ukrainciv/ [in Ukrainian].