Between money and speculative asset: the role of financial literacy on the perception towards Bitcoin in Italy

With Bitcoin at the forefront, cryptocurrencies are gaining traction as an alternative asset investment, particularly among young investors. Although most of the empirical evidence has shown that it could not be defined as a currency, some Bitcoin users argue the opposite. This paper analyzes the factors influencing the perception of Bitcoin, i.e., whether it is a currency or an asset, with a focus on financial literacy among a subject pool of university students in Italy. The results show that, after controlling for several individual characteristics such as behavioral biases, personal attitudes, psychological traits, and socio-demographic information, this cryptocurrency is considered more than just an asset, and thus it could replace currency, among subjects with lower financial literacy, higher knowledge of Bitcoin, and those who do not trust the banking system. In contrast, Bitcoin is considered a speculative asset among those individuals with higher financial literacy. In line with the recent evidence that cryptocurrencies are mostly owned by young investors, results indicate the importance of increasing the level of financial education among them.