Are cryptocurrency traders pioneers or just risk-seekers? Evidence from brokerage accounts

Matthias Pelster, Bastian Breitmayer and Tim Hasso

Economics Letters, 2019, vol. 182, issue C, 98-100

Abstract: Are cryptocurrency traders driven by a desire to invest in a new asset class to diversify their portfolio or are they merely seeking to increase their levels of risk? To answer this question, we use individual-level brokerage data and study their behavior in stock trading around the time they engage in their first cryptocurrency trade. We find that when engaging in cryptocurrency trading investors simultaneously increase their risk-seeking behavior in stock trading as they increase their trading intensity and use of leverage. The increase in risk-seeking in stocks is particularly pronounced when volatility in cryptocurrency returns is low, suggesting that their overall behavior is driven by excitement-seeking.

Keywords: Cryptocurrencies; Bitcoin; Investor; Risk-seeking (search for similar items in EconPapers)
JEL-codes: D1 G1 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (25)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:182:y:2019:i:c:p:98-100

DOI: 10.1016/j.econlet.2019.06.013

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