Report: Crypto Investors Perform Poorly on Basic Stock Market Knowledge

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In order to assess the stock market knowledge of retail investors, online casino critic GamblersPick spoke to over 1,000 people who have invested at least once.

According to the survey results, respondents who owned cryptocurrency scored significantly lower than investors who did not own any crypto.

The results also revealed that 70% of digital investors invested in Bitcoin (BTC), compared to 39% who invested in Litecoin (LTC), the second most popular coin.

Best portfolio choices

The study first asked participants what they had invested in and found that 69% of those surveyed had cryptocurrencies.

Continuing on, the report looked at which stocks and cryptocurrencies are most popular among retail investors.

“GameStop was the most popular action for our respondents over the past six months. A third of investors had put their money on this company, ”the report read, adding that the second most popular choice was another“ meme stock, ”BlackBerry.

When it comes to cryptocurrencies, the world’s largest crypto is by far the most popular, with 70% of digital investors responding that they have bought Bitcoin.

While 39% of those polled said they had invested in Litecoin, 37% said they had bought Ethereum (ETH).

What do newbie investors know?

“Sections of new investors have gone public since the pandemic, with newbies now making up 15% of all retail investors,” the report noted, while continuing to address the most common knowledge gaps.

Despite the short selling behind the GameStop frenzy, 83% of respondents did not correctly identify the definition of “short sale” in a multiple choice question.

Short selling involves borrowing a share of a stock and then selling it.

If the price behaves as expected, traders can buy back the stock when its price drops and keep the difference.

Additionally, most people couldn’t identify the correct term for the abbreviation GME, as 73% of respondents did not recognize it as an example of a “stock symbol”.

More than half of investors could not properly explain what “demand” and “supply” were.

Simply put, the “bid” price is the maximum amount a buyer is willing to pay for a stock, while the “ask” is the minimum price a seller would take for that same stock.

Other gaps in common knowledge emerged when respondents were asked to correctly define “hedge funds”, “mutual funds” and “exchange funds”.

“What made the real difference was whether or not a person owned cryptocurrencies,” the report read, noting that those who didn’t do much better than those who did.

One possible explanation, according to GamblersPick, is that cryptocurrencies tend to attract younger and less experienced investors.

It could also be that crypto investors are completely withdrawing from the traditional stock market and have little interest in learning about the stock market.

In addition to assessing knowledge gaps, the survey also explored the general attitude towards the market and investing, and found that 67% of those surveyed thought the stock market was like gambling.

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