Who are the Bitcoin investors? Evidence from indirect cryptocurrency investments

Dominique Marcel Lammer, Tobin Hanspal and Andreas Hackethal

No 277, SAFE Working Paper Series from Leibniz Institute for Financial Research SAFE

Abstract: Cryptocurrencies have received growing attention from individuals, the media, and regulators. However, little is known about the investors whom these financial instruments attract. Using administrative data, we describe the investment behavior of individuals who invest in cryptocurrencies with structured retail products. We find that cryptocurrency investors are active traders, prone to investment biases, and hold risky portfolios. In line with attention effects and anticipatory utility, we find that the average cryptocurrency investor substantially increases log-in and trading activity after his or her first cryptocurrency purchase. Our results document which investors are more likely to adopt new financial products and help inform regulators about investors' vulnerability to cryptocurrency investments.

Keywords: Bitcoin; Cryptocurrencies; Structured retail products; Retail investors; Household finance; Investor behavior (search for similar items in EconPapers)
JEL-codes: D14 G02 G11 G15 G40 G50 (search for similar items in EconPapers)
Date: 2020
New Economics Papers: this item is included in nep-pay
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:safewp:277

DOI: 10.2139/ssrn.3501549

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