Determinants of Crypto Trading Activity

IPEM Journal Management > Determinants of Crypto Trading Activity

Determinants of Crypto Trading Activity

Dr. Syed Md Faisal Ali Khan , Dr. Divya Rana

Vol 17 , Issue 1 , July 2023 | Pages: 44-56

Published Online: July, 2023

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Author Details

1. Dr. Syed Md Faisal Ali Khan , Corresponding Author, Lecturer – Department of MIS, CBA, Jazan University, Saudi Arabia
2. Dr. Divya Rana, Assistant Professor, Management Department, Institute of Professional Excellence and Management, Ghaziabad, Uttar Pradesh

Cryptocurrency trading offers particular traits that have attracted investors as well as significant disadvantages. With the short-term rise in cryptocurrency values, more investors were enthused about investing in it, increasing fears of a speculative bubble. Despite worries about its inadequacies, this study looked into the many aspects involved in cryptocurrency trading. In what concerns to psychological, social, cultural, personal, economic, perceived risk and financial literacy, we first hypothesized that crypto investors would show differences in multiple factors when compared to share investors. Based on our assumptions about these differences, we secondly hypothesized that investors’ psychological, social, cultural, personal economic, perceived risk and financial literacy could predict whether they could invest in crypto or shares. In total, 507 respondents completed the research protocol and were sorted into Crypto investors (n=207), share investors (n=189), and non-investors (n=111). A self-report questionnaire on demographic data, psychological, social, cultural, economic, perceived risk and financial literacy were administrated. The result of the study indicated that crypto investments can be attributed to the interaction of multiple factors, among which psychological, social, cultural, personal economic, perceived risk and financial literacy are particularly important. Specifically, the perceived risk and financial literacy are the strongest predictive factor for crypto trading. Crypto traders were distinct with regard to higher novelty seeking, higher gambling tendencies, and unique investment patterns. Thus, personality, psychological states, and investment patterns could explain the substantial investments in crypto trading.

Keywords

cryptocurrency; determinants; investors; crypto traders
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Khan and Rana (2023). Determinants of Crypto Trading Activity. Issue No. 1. Vol. 17 p. 44-56