Who are the Bitcoin investors? Evidence from indirect cryptocurrency investments

  • Cryptocurrencies have received growing attention from individuals, the media, and regulators. However, little is known about the investors whom these financial instruments attract. Using administrative data, we describe the investment behavior of individuals who invest in cryptocurrencies with structured retail products. We find that cryptocurrency investors are active traders, prone to investment biases, and hold risky portfolios. In line with attention effects and anticipatory utility, we find that the average cryptocurrency investor substantially increases log-in and trading activity after his or her first cryptocurrency purchase. Our results document which investors are more likely to adopt new financial products and help inform regulators about investors' vulnerability to cryptocurrency investments.

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Author:Dominique Marcel LammerGND, Tobin HanspalGND, Andreas HackethalORCiDGND
Parent Title (English):SAFE working paper series ; No. 277
Series (Serial Number):SAFE working paper series (277)
Place of publication:Frankfurt am Main
Document Type:Working Paper
Year of Completion:2020
Year of first Publication:2020
Publishing Institution:Universit├Ątsbibliothek Johann Christian Senckenberg
Release Date:2020/05/18
Tag:Bitcoin; Cryptocurrencies; Household finance; Investor behavior; Retail investors; Structured retail products
Issue:December 2019
Page Number:52
Institutes:Wirtschaftswissenschaften / Wirtschaftswissenschaften
Wissenschaftliche Zentren und koordinierte Programme / House of Finance (HoF)
Wissenschaftliche Zentren und koordinierte Programme / Center for Financial Studies (CFS)
Wissenschaftliche Zentren und koordinierte Programme / Sustainable Architecture for Finance in Europe (SAFE)
Dewey Decimal Classification:3 Sozialwissenschaften / 33 Wirtschaft / 330 Wirtschaft
Licence (German):License LogoDeutsches Urheberrecht