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Retail Investors’ Cryptocurrency Investments

Author

Listed:
  • Vesa Pursiainen

    (University of St. Gallen; Swiss Finance Institute)

  • Jan Toczynski

    (University of Zurich; 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.

Suggested Citation

  • Vesa Pursiainen & Jan Toczynski, 2023. "Retail Investors’ Cryptocurrency Investments," Swiss Finance Institute Research Paper Series 23-51, Swiss Finance Institute.
    • Handle: RePEc:chf:rpseri:rp2351
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    More about this item

    Keywords

    cryptocurrency; retail investors; fintech; market timing;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G51 - Financial Economics - - Household Finance - - - Household Savings, Borrowing, Debt, and Wealth

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