Retail Investors’ Cryptocurrency Investments

Vesa Pursiainen and Jan Toczynski
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Vesa Pursiainen: University of St. Gallen; Swiss Finance Institute
Jan Toczynski: University of Zurich; Swiss Finance Institute

No 23-51, Swiss Finance Institute Research Paper Series from Swiss Finance Institute

Abstract: We use transaction data gathered by a large fintech firm to study retail investors’ investments in cryptocurrencies. Crypto investors tend to be young, male, high-income, and live in wealthy urban areas with high levels of self-employment and low levels of altruism. Crypto investments are positively associated with stock investments and the use of robo-investing apps, as well as with gambling and the use of round numbers. Net flows into cryptocurrencies are negatively correlated with short-term past returns but positively with longer-term ones. Historical high and low price points also seem to matter. Personal initial experiences of crypto returns at adoption affect subsequent crypto investments. Investors exhibit little market timing ability, but controlling for the time of entry, women do better and stock investors worse.

Keywords: cryptocurrency; retail investors; fintech; market timing (search for similar items in EconPapers)
JEL-codes: G11 G23 G51 (search for similar items in EconPapers)
Pages: 42 pages
Date: 2023-06
New Economics Papers: this item is included in nep-fdg and nep-pay
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Persistent link: https://EconPapers.repec.org/RePEc:chf:rpseri:rp2351

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