Crypto's performance looks strong on the surface, but a deep-seated knowledge gap is creating instability from within. This isn't a minor issue. It may contribute to market volatility and could hinder broader adoption efforts. When investors lack a clear understanding of the fundamentals, market sentiment can shift quickly, sometimes amplifying volatility across the ecosystem.
Data brings the problem into sharp focus. A recent GoMining survey revealed a telling statistic: more than 70% of people who own Bitcoin feel they cannot properly explain its mechanics. Similarly, a study by PiP World described the crypto community's financial literacy rate as "dangerously low," falling significantly behind the US average.
Image credit: Binance
This challenge is a primary obstacle to broader acceptance. Many Americans who don't own crypto cite limited understanding or uncertainty about how it works as key reasons for staying on the sidelines. Research from the NCA confirms that nearly 90% feel unknowledgeable, and this confusion is the primary barrier for almost half of them.
With the market maturing, building a foundation of knowledge is now essential for stability. This reality has prompted industry leaders to take a more active role in education.
The Crypto Literacy Divide
The problem isn't awareness; it's a deficit in functional understanding. According to research from Binance's ANZ division, 86% of non-investors are familiar with crypto, but this familiarity is superficial. But that casual familiarity rarely goes deeper.
Many people recognize the names of major cryptocurrencies. But that's often where their knowledge ends. The actual mechanics of mining, the industry's unique jargon, and the basic rules of investing still remain major points of confusion. Dig into the essentials, and you'll find these concepts are still a complete mystery to most.
This knowledge gap creates clear demographic fault lines. Aevi research shows that familiarity and use of crypto fall sharply after age 45. There is also a significant gender gap. More than 60% of women admit to not fully understanding cryptocurrencies, while fewer than 40% of men say the same.
The real-world consequences are clear. Limited user knowledge can contribute to emotional trading behaviors, which some analysts associate with increased market volatility. This can leave parts of the ecosystem susceptible to misinformation, which tends to spread rapidly on social media.
Adding to the risk, a study by Carbo-Valverde found that overconfidence, a known bias in financial literacy, is a strong predictor of crypto ownership. The data points to a worrying pattern: the most confident players in the market are often not the most knowledgeable.
When that kind of overconfidence takes the wheel, it can lead to riskier trading behaviors, such as overleveraging or investing in unfamiliar projects, which may increase overall market exposure.
The Answer: More Education
Even with this significant knowledge gap, leading digital assets have outperformed traditional markets. Binance Research data from 2025 shows ETH returning 36% year-to-date, BTC 18%, and BNB an impressive 19%, all ahead of the S&P 500's 10%. This contrast frames education not just as a benefit, but as a stabilizing factor that can help support long-term growth and transparency.
Image Credit: Binance
As a leader in this effort, Binance has developed a multi-layered educational strategy. The core of this effort is Binance Academy, a free platform started in 2018. It has reportedly already provided educational content, from articles to interactive "Learn & Earn" programs, to more than 64 million people. It was built to be a go-to resource, with hundreds of articles and a full glossary available to help make sense of crypto's most complex ideas.
Back in August, Binance launched the "Humans of Binance" content series to spotlight real people whose lives have been transformed by blockchain technology and the Binance ecosystem. Binance CMO Rachel Conlan says, "At Binance, we believe authentic storytelling is the foundation for building meaningful connections with people from all walks of life. Through ‘Humans of Binance,' we're encouraging everyone to share their unique crypto stories, with the hope that this will be the start of a movement to debunk misconceptions of crypto and highlight its true potential."
"In a market that's often crowded and misunderstood, emotional narratives like this allow us to cut through the noise, build genuine brand trust, and inspire new users to discover the possibilities of blockchain technology. We are excited to be part of the crypto journey for the next one billion crypto users and beyond," Rachel added.
This initiative also pushes into formal education. Through its Global University Outreach program, Binance reports working with over 200 universities in more than 50 countries to teach one million students about blockchain by 2026.
These aren't just introductory lectures; collaborations focus on technical skills like Solidity to build a Web3 talent pool. Because informed regulation is crucial for the industry's future, Rounding out its educational offerings, programs like Crypto School give users a clear learning path with structured courses for all skill levels.
Building a Foundation for a Stable Future
Crypto is at a critical inflection point. While asset performance has been impressive, it's dangerously mismatched with the low level of user understanding. This isn't just a hurdle—it can be a contributing factor to market instability, making sustained development more challenging.
Accessible education is widely viewed as an effective way to help mitigate these risks, much as it was in the early days of the internet when moving from a niche technology to a global utility required educating a generation of new users.
Industry leaders are now stepping in with comprehensive programs aimed at building a more rational investor base. The goal is to create a genuine understanding of the technology and its financial principles. When an investor truly understands the fundamentals, they are far less prone to the emotional trading that defines crypto's volatility.
A market where users are more familiar with concepts like blockchain, self-custody, and risk management is generally seen as better equipped to handle volatility. Education is the bridge that will carry digital assets from a phase of speculation to one of trust and real integration into global finance.
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This post was authored by an external contributor and does not represent Benzinga's opinions and has not been edited for content. This content is for informational purposes only and not intended to be investing advice.
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