Cryptocurrency Investing

The ability to understand cryptocurrency market structures, analyze the value of digital assets, and make systematic investment decisions.

Cryptocurrency Investing is a comprehensive ability to understand the technical foundations and economic characteristics of digital assets such as Bitcoin and Ethereum, evaluate risks, and formulate and execute portfolio strategies. It covers the full spectrum of digital asset investing, from basic trading to regulatory environments, on-chain data analysis, and DeFi protocol utilization.

Business & Management

7 Levels

Published: Mar 16, 2026 · Updated: Apr 18, 2026 · v4

Levels

You first encounter what Bitcoin is and why it was created, and how blockchain technology works. You explore the concept of wallets, the difference between public and private keys, and experience the basic buy/sell process through exchanges. This corresponds to the Low (0-4) level on the Crypto Literacy Scale.

Can explain the background and core purpose of Bitcoin's creation
Can explain the basic operating principles of blockchain (distributed ledger, consensus mechanism)
Can explain the difference in roles between a public key and a private key
Can execute the process of purchasing cryptocurrency on a centralized exchange (CEX) and withdrawing to a wallet
Can list at least three major risk factors of cryptocurrency investing (price volatility, hacking, regulatory uncertainty)

What Comes Next

Completing most items here means you've crossed the Crypto Literacy Scale's Low tier (0-4) threshold. The next stage, Market Foundations, introduces altcoin comparison and market data reading, aligning with FINRA's Foundational curriculum.

References

FINRA (Financial Industry Regulatory Authority)educational_program

A 3-tier education structure (Foundational → Intermediate → Advanced) that directly informs L1-L5 level boundary design. The stage-specific curriculum (terminology → market deep-dives → complex concepts) sets the checklist difficulty benchmarks.

FINRA Crypto and Blockchain Education Program

CFA InstituteCertification

Four learning outcomes — DLT explanation, investment characteristics comparison, investment type classification, and risk-return-diversification analysis — provide concrete behavioral and numerical evidence for L3-L5 checklist items.

CFA Program Level I: Introduction to Digital Assets (2026 Curriculum)

U.S. Securities and Exchange Commissiongovernment_data

Securities classification (Howey Test), disclosure requirements, custody regulations, and investor protection frameworks serve as the authoritative basis for L4-L6 regulatory comprehension competencies.

SEC Crypto Task Force: Digital Asset Regulatory Framework

Jones, Luu & Samuel (University of Cincinnati) — Journal of Consumer Affairs (Wiley, 2025)academic_research

An IRT-based 3-tier (Low 0-4 / Medium 5-7 / High 8-10) cryptocurrency literacy scale. Difficulty parameters across 3 domains (Technology, Economics, Policy) provide empirical evidence for L1-L7 checklist difficulty placement.

Measuring Crypto Literacy (Crypto Literacy Scale)

Kahneman & Tversky (1979), Econometricaacademic_research

Prospect theory explains how loss aversion and framing effects drive behavioral transitions in cryptocurrency portfolio management across levels

Prospect Theory: An Analysis of Decision under Risk

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Cryptocurrency Investing

Levels

Level 1#Bitcoin#Blockchain#WalletBasicsThe stage of understanding basic cryptocurrency concepts and first encountering the core principles of Bitcoin and blockchain.

Level 2#Altcoin#MarketCap#ExchangeTradingThe stage of understanding differences between major cryptocurrencies, reading market data, and independently executing basic trades.

Level 3#FundamentalAnalysis#Tokenomics#RiskManagementThe stage of analyzing the fundamental value of cryptocurrencies and investing independently based on self-established criteria.

Level 4#AssetAllocation#OnChainAnalysis#RegulatoryComplianceThe stage of building and managing a systematic cryptocurrency portfolio incorporating on-chain data and the regulatory environment.

Level 5#YieldFarming#LiquidityProvision#CrossChainStrategyThe stage of designing complex yield strategies using DeFi protocols and executing cross-chain investments.

Level 6#InstitutionalCrypto#TokenDesign#RegulatoryFrameworkThe stage of designing institutional-grade cryptocurrency investment frameworks and contributing to token economics modeling and regulatory framework development.

Level 7#CryptoParadigm#GlobalAdoption#MonetaryInnovationThe stage of articulating the long-term direction of cryptocurrency markets and making historical contributions to the development of the global digital asset ecosystem.

References

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