Can Catholics believe in fairies, mermaids, and other “cryptids”?
There is no evidence that these exist so I see no point in believing in fairies and mermaids as well as other “cryptids” as it doesn’t enrich our spiritual lives as Catholics.
People ask about the Loch Ness (Nessie) cryptid; even though there’s been some evidence that something “strange” may be lurking in a lake in Scotland but there really is no need to become so bothered with all those stories
Tooth fairies and Easter bunny tales aren’t so bad; parents may tell their kids these tales because these mythical creatures are known for their generosity and kindness. Fantasies like these are very unlikely to have a harmful effect on the child. If anything, it should make them happy; but the parents or any adult actually believing they exist isn’t what I advise