40% of crypto investors spend 2 hours on due diligence

In a new financial literacy study, crypto exchange Bybit promotes the necessity to dive into the journey of retail investors within the wild west of the digital asset space.

While the level of investment knowledge is slowly improving and there are signs that crypto retail investors are diversifying their portfolio, there is still more to do, the survey claims.

In the process, Bybit introduces the industry’s first investment literacy framework and highlights key findings to equip existing and prospective crypto investors with appropriate education.

As part of its survey, Bybit and Toluna quizzed 10,500 unique participants in 19 markets about their knowledge and attitudes towards cryptocurrencies with 1,748 identified as ‘crypto investors’.

The purpose of the joint study, which launched in November 2022, was to provide an overview on how crypto investors perceive centralized exchanges, KYC. It also aims to explore whether there are significant differences amongst countries, markets, and generations in terms of retail investment literacy.

For the purpose of this survey, the authors identified three main milestones for a typical crypto investor to get involved. First, their decision to invest in crypto, second, choosing a provider or project, and last, how they manage their portfolios.

Although the KYC procedure is acknowledged as a useful tool to prevent cybercrimes and hacks, more than 50% of participants have little to no preference when it comes to exchanges using identity checks. However, 1 in 2 investors call for more centralized control for wider Web3 adoption.

CEXes and DeFi are not mutually exclusive

When asked if they would prefer trading off to protect their crypto investments, 25% of correspondents said they are willing to accept CEXs regulation for greater safety. As the survey pass rate shows, crypto investors put lower scores on NFT and DeFi than most Web2 players, reflecting their safety concerns in a decentralized environment.

Interestingly, though, the findings indicate that DeFi believers still put high trust scores on CEXes. About 90% of respondents put at least 4 out of 5 trust scores, debunking the myth that centralization and decentralization cannot go hand in hand.

The report says that 40% of investors surveyed spend less than 2 hours doing due diligence on a project before investing. More concerning still, they have prioritized reputational factors over other more fundamental factors.

Nearly one in three correspondents invest in crypto due to its growth and wealth accumulation potential. However, 46% of crypto investors are in it for the long run, with an investment horizon of 7 months to over 2 years.

To sum up, the findings represent a brief cause for optimism with some promising upsides in an otherwise chaotic industry.  After gaining deeper insight into the user journey of crypto investors, Bybit believes that the investment literacy of crypto investors is advancing with more room to mature.  The study also highlights the need for approachable crypto education that everyone can grasp regardless of income, gender, race or educational status.

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