A report published by the Bank for International Settlements(BIS) found that investors holding XRP or Ether surpassed other crypto owners in terms of education. The report titled “Distrust or speculation? The socioeconomic drivers of US cryptocurrency investments”, studied various factors that contributed to American retail investors’ inclination towards digital assets.

XRP and Ether Traders Lead Bitcoin and Litecoin in Education

The report in question is authored by Dr. Raphael Auer, principal economist at the Monetary and Economic Department of the BIS, and David Tercero-Lucas, a Ph.D. student at the Autonomous University of Barcelona. Together, the two researchers focused on three main objectives in the paper. The first was the relationship between cryptocurrencies and distrust in Fiat currencies and regulated finance. The second was a socioeconomic study of US retail investors and the third was the analysis of the “evolution of patterns of cryptocurrency investments over time.”

Following the paper’s release, Dr. Auer published a series of tweets related to its findings. As per the data gathered by the report, XRP and Ethereum owners emerged as the most educated crypto owners in the market. Conversely, Litecoin owners, who were ranked the third-largest investor base, appeared to be the least educated from the sample. Meanwhile, Bitcoin holders ranked in the middle, with twice as many investors as Ether.

Across cryptocurrencies, in our sample we find that owners of #xrp and #ether are the most educated, while those owning #litecoin are the least educated, with #bitcoin and #bch ranking in the middle. #btc [5/7] pic.twitter.com/t0XbeTJiWf

— Raphael Auer (@RaphAuer) July 1, 2021

Additionally, owners of XRP and Ether were also found to be wealthier than other investors, with higher than average household income.

Crypto Investments are Not Based in Distrust of Fiat Currencies

Contrary to popular belief, the report found that the demand for cryptocurrencies is not driven by a distrust of traditional payment instruments. In fact, there were no differences in the “perceived security” of cash and online and offline banking. Although, compared to non-investors, cryptocurrency investors were more likely to find cash and traditional banking facilities lack convenience. 

The report also found a positive correlation between the level of digitalization and the knowledge of cryptocurrencies. As for socioeconomic characteristics, the report concluded that knowledge of the underlying technology of cryptocurrencies has a limited impact on investment decisions made by a gender or age group. This is corroborated by the ownership gap that has emerged between men and women despite the decreased difference in knowledge acquisition.