Bias in cryptocurrency investing: The effect of financial and moral considerations

Hesam Shahriari, Adam Stivers and Ming Tsang

Journal of Behavioral and Experimental Finance, 2025, vol. 47, issue C

Abstract: In an experimental investment allocation task, we find that the average participant did not appear to factor cryptocurrency’s social aspects into their allocation decisions based on the average allocation to a cryptocurrency. Moreover, the cryptocurrency’s positive returns did not help to increase investment levels. However, highlighting its high volatility and potential risks was a bigger deterrent to cryptocurrency investing compared to when no such information was provided. We observe an irrational bias toward cryptocurrencies when it is not optimal to do so. We find that younger individuals, those who view cryptocurrencies favorably, and those with past cryptocurrency investing experience are typically more prone to this bias. This was less likely to be the case where descriptive information on either the positive or negative social and environmental impact of cryptocurrencies was provided. Therefore, while highlighting cryptocurrencies’ social/environmental implications does not appear to influence average allocation, it could reduce bias toward cryptocurrencies.

Keywords: Cryptocurrency investing; Socially responsible investing; Retail investors; ESG; Allocation task (search for similar items in EconPapers)
JEL-codes: G11 G40 G50 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:beexfi:v:47:y:2025:i:c:s2214635025000784

DOI: 10.1016/j.jbef.2025.101097

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