Rational versus Irrational Behavior of Indonesian Cryptocurrency Owners in Making Investment Decision

Elisa Tjondro (), Saarce Elsye Hatane, Retnaningtyas Widuri and Josua Tarigan
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Elisa Tjondro: Department of Accounting, School of Business and Management, Petra Christian University, Siwalankerto 121-131, Surabaya 60236, Indonesia
Saarce Elsye Hatane: Department of Accounting, School of Business and Management, Petra Christian University, Siwalankerto 121-131, Surabaya 60236, Indonesia
Retnaningtyas Widuri: Department of Accounting, School of Business and Management, Petra Christian University, Siwalankerto 121-131, Surabaya 60236, Indonesia
Josua Tarigan: Department of Accounting, School of Business and Management, Petra Christian University, Siwalankerto 121-131, Surabaya 60236, Indonesia

Risks, 2023, vol. 11, issue 1, 1-18

Abstract: The purpose of this study is to investigate the salient factors that influence Indonesian cryptocurrency owners in making their investment decision. This study employs intergroup bias, subjective norms, overborrowing, and spending control to explain cryptocurrency investment behavior. The questionnaire was collected from 309 respondents from the five largest internet user areas: Jakarta, Surabaya, Bandung, Semarang, and Medan. This study executes the research framework using binary logistic regression. The results reveal that intergroup bias and overborrowing are the most impulsive factors contributing to the cryptocurrency investment decisions over the past year. Furthermore, after November 2021, Indonesian crypto owners are more irrational in a bearish period since their investment decisions are driven by their desire to be accepted in the social group. Moreover, when they have overindebtedness, instead of solving their debt problems, they prefer to spend their money on cryptocurrency investments. The subjective norms’ influencers suggest that crypto owners not invest when the cryptocurrency price is sharply declining. The findings contribute to the dual-systems perspective and social contagion theories, enriching the empirical study regarding investment behavior.

Keywords: cryptocurrency; intergroup bias; subjective norms; self-control; overborrowing; spending control; survey (search for similar items in EconPapers)
JEL-codes: C G0 G1 G2 G3 K2 M2 M4 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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