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RWP 24-03, March 2024

Cryptocurrency owners without sufficient financial literacy and risk tolerance may be financially vulnerable, as the cryptocurrency market is highly volatile and lacks consumer protections. Our study divides cryptocurrency owners into three groups based on their purpose for holding cryptocurrencies—for investment only (investors), for transactions only (transactors), and for a mix of investment and transactions (mix users)—and examines how each group correlates with financial literacy and risk tolerance compared to consumers who do not own cryptocurrencies (nonowners). Using the 2022 Survey of Household Economics and Decisionmaking, we find that investors and mix users are significantly or moderately more financially literate and risk tolerant than nonowners, but transactors are less financially literate and slightly more risk tolerant than nonowners. We also find that the three groups of cryptocurrency owners vary by demographic and financial characteristics. Our findings highlight that transactors could be particularly financially vulnerable in the absence of consumer protections in the cryptocurrency market.

JEL Classifications: D14, D91, E42

Article Citation

  • Hayashi, Fumiko, and Aditi Routh. 2024. “Financial Literacy, Risk Tolerance, and Cryptocurrency Ownership in the United States.” Federal Reserve Bank of Kansas City, Research Working Paper no. 24-03, March. Available at
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Fumiko Hayashi

Senior Policy Advisor

Fumiko Hayashi is a Senior Policy Advisor specializing in payments in the Economic Research Department at the Federal Reserve Bank of Kansas City. Since joining the Federal Reser…

Aditi Routh


Aditi Routh is an Economist in the Economic Research Department at the Federal Reserve Bank of Kansas City. Her research focuses on payment behavior of consumers, the financially…