How to Be a Winner in This Crypto Cycle: Key Insights from the Crypto Competence Index 2024
The crypto market is heating up, and fast. With excitement building, everyone is looking to maximize their gains. But what many don’t realize is that while the market may be poised for a parabolic rise, more people will end up losing money than making it. The real question is: how can you position yourself to be among the winners?
A recent report, the Crypto Competence Index 2024, may hold the answers. Co-authored by Coinfessions and Pip World, this report sheds light on financial literacy in the crypto community and how it impacts investment success. Let’s break it down in simple terms and explore how you can navigate the market wisely.
Understanding the Authors: Coinfessions & Pip World
Before diving into the report, let’s get familiar with its authors.
Coinfessions is a well-known platform where crypto users anonymously share their experiences—their wins, losses, and confessions. It’s a reality check that helps investors learn from others’ mistakes.
Pip World, on the other hand, takes a gamified approach to financial education, making learning about crypto fun and interactive. From Telegram games to in-game experiences on Roblox, it provides an engaging way to understand financial concepts.
The Harsh Reality: Crypto Investors Lag in Financial Literacy
One of the key takeaways from the report is a sobering one: the crypto community significantly lags behind the global average in financial literacy.
Financial literacy—understanding budgeting, saving, debt management, and smart investing—is essential for success. Yet, the report reveals that only 25% of crypto investors are financially literate, compared to 50% of adults in the U.S. and 33% globally. In contrast, the most financially literate regions—Denmark, Norway, and Sweden—boast an impressive 71% literacy rate.
The takeaway? Many crypto investors are navigating a volatile market without the necessary knowledge to make informed decisions. And as history has shown, lack of financial literacy often leads to devastating losses.
Who Are the Most (and Least) Financially Literate Investors?
The report categorizes different types of crypto investors based on their financial literacy levels. Surprisingly, the most financially literate group is FOMO traders, who scored 100% literacy—which seems contradictory given that emotional trading often leads to losses.
Other groups ranked as follows:
- Crypto whales – 96% financially literate (not surprising, given their success)
- Trend followers – 88% financially literate (they stay informed and adapt to market trends)
- HODLers – 80% financially literate (a testament to patience and long-term vision)
- Speculators – 64% financially literate
- Volatility seekers – 50% financially literate
- Pump-and-dump traders – 45% financially literate (remarkably high considering their questionable tactics)
- Day traders – 27% financially literate, the lowest of all groups
The findings highlight a common misconception: just because you trade frequently doesn’t mean you’re making informed decisions. In fact, day traders often struggle due to the complexity and emotional toll of short-term trading.
Crypto Stress: Staying in the Market Despite Heavy Losses
Another revealing aspect of the report is how emotionally draining crypto can be. Around 70% of investors confess to impulsive behaviors that lead to massive losses. Coinfessions posts frequently highlight traders who have taken extreme risks—such as using student loans to invest in Ethereum validators or taking out bank loans to buy into private sales.
The message is clear: risky, emotional decisions lead to regret. The report states that 76% of Coinfessions users express frustration, stress, or regret over their trading decisions. Yet, despite the setbacks, many choose to stay in the market, hoping for redemption in the next bull run.
Winners vs. Losers: The Reality of Crypto Investing
If there’s one crucial insight from this report, it’s that winning in crypto is harder than it looks. The statistics show that more investors lose money than make it:
- Volatility seekers lose 97% of the time.
- FOMO traders lose 85% of the time.
- Crypto whales have the best success rate, winning 41% of the time.
- Trend followers (40%) and HODLers (34%) also fare better than most.
The takeaway? Following trends and practicing patience (HODLing) tend to yield better results than chasing volatility or making impulsive trades.
Key Takeaways for Success in Crypto
So, how do you ensure you’re on the winning side of the equation? Here are three fundamental principles:
- Prioritize Education
- Financial literacy is the foundation of success in crypto. Learn about market cycles, risk management, and investment strategies. Follow trusted sources that provide high-quality crypto education.
- Have a Plan (and Stick to It)
- Set clear investment goals: Which cryptos will you invest in? How much risk are you willing to take? When will you take profits? Having a well-defined strategy helps prevent emotional decision-making.
- Avoid Unnecessary Trading
- The report shows that frequent trading leads to higher losses. Unless you’re an experienced trader, HODLing and following trends tend to be safer, more profitable approaches.
Final Thoughts: Crypto Resilience & The Future
Despite the financial literacy gap and the high risk of losses, 40% of crypto traders remain hopeful and committed. The belief in crypto’s potential remains strong, and those who take the time to educate themselves and plan strategically are the ones most likely to succeed.
As Said Naja, CEO of Pip World, put it: “Too many traders are navigating blind, without the fundamental knowledge needed to succeed.”
Don’t be one of them. Educate yourself, plan ahead, and stay disciplined. That’s how you position yourself as a winner in this cycle—and beyond.