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Trust me bro: An examination of the influence of cryptocurrency literacy and overconfidence on victimization and financial loss

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  • Engle, Timothy A.
  • Connealy, Nathan
  • Dulisse, Brandon C.

Abstract

The rapid rise of cryptocurrency adoption has coincided with a surge in fraud, theft, and reported losses in recent years. This study investigates the role of cryptocurrency literacy and overconfidence in predicting financial loss among a sample of U.S. cryptocurrency investors surveyed in 2025. Utilizing the Quick-5 Cryptocurrency Literacy Scale (Quick-5 CLS), we assess actual and perceived literacy, examining discrepancies that may indicate overconfidence. The analyses revealed that higher actual cryptocurrency literacy reduces the odds of financial loss by 19%, while increased exposure to crypto-related social media content heightens victimization risk. Overconfidence, observed in 35.5% of respondents, was significantly associated with demographic factors such as race and sex, but not with hypothesized predictors like FOMO or social media use. These findings underscore the protective role of crypto literacy against fraud and highlight the risks posed by overconfidence and social media exposure.

Suggested Citation

  • Engle, Timothy A. & Connealy, Nathan & Dulisse, Brandon C., 2026. "Trust me bro: An examination of the influence of cryptocurrency literacy and overconfidence on victimization and financial loss," Technology in Society, Elsevier, vol. 86(C).
    • Handle: RePEc:eee:teinso:v:86:y:2026:i:c:s0160791x26000667
    DOI: 10.1016/j.techsoc.2026.103277
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