Who Are the Bitcoin Investors? Evidence from Indirect Cryptocurrency Investments

52 Pages Posted: 31 Dec 2019 Last revised: 18 May 2020

See all articles by Dominique Lammer

Dominique Lammer

affiliation not provided to SSRN

Tobin Hanspal

WU Vienna University of Economics and Business

Andreas Hackethal

Goethe University Frankfurt - Faculty of Economics and Business Administration; Leibniz Institute for Financial Research SAFE

Date Written: December 10, 2019

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

JEL Classification: G50, G40, D14, G11, G15, G02

Suggested Citation

Lammer, Dominique and Hanspal, Tobin and Hackethal, Andreas, Who Are the Bitcoin Investors? Evidence from Indirect Cryptocurrency Investments (December 10, 2019). SAFE Working Paper No. 277. Available at SSRN: https://ssrn.com/abstract=3501549 or http://dx.doi.org/10.2139/ssrn.3501549

Dominique Lammer

affiliation not provided to SSRN

Tobin Hanspal (Contact Author)

WU Vienna University of Economics and Business ( email )

Welthandelsplatz 1 1
Wien, 1020
Austria

Andreas Hackethal

Goethe University Frankfurt - Faculty of Economics and Business Administration ( email )

Theodor-W.-Adorno Platz 3
Frankfurt am Main, 60323
Germany

Leibniz Institute for Financial Research SAFE ( email )

(http://www.safe-frankfurt.de)
Theodor-W.-Adorno-Platz 3
Frankfurt am Main, 60323
Germany

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