Who Invests in Crypto? Wealth, Financial Constraints, and Risk Attitudes

68 Pages Posted: 22 Nov 2022 Last revised: 1 Nov 2023

See all articles by Darren Aiello

Darren Aiello

Brigham Young University

Scott R. Baker

Northwestern University

Tetyana Balyuk

Emory University - Goizueta Business School

Marco Di Maggio

Harvard Business School; National Bureau of Economic Research (NBER)

Mark J. Johnson

Brigham Young University - Department of Finance

Jason D. Kotter

Brigham Young University - Department of Finance

Date Written: November 18, 2022

Abstract

We provide a first look into the drivers of household cryptocurrency investing. Analyzing consumer transaction data for millions of U.S. households, we find that, except for high-income early adopters, cryptocurrency investors resemble the general population. These investors span all income levels, with most dollars coming from high-income individuals, similar to equity investors. High past crypto returns and personal income shocks lead to increased cryptocurrency investments. Higher household-level inflation expectations also correlate with greater crypto investments, aligning with hedging motives. For most U.S. households, cryptocurrencies are treated like traditional assets.

Keywords: Consumer finance, cryptocurrency, FinTech, inflation, portfolio choice, stimulus

JEL Classification: G51, G23, G38, G11, E42, E31

Suggested Citation

Aiello, Darren and R. Baker, Scott and Balyuk, Tetyana and Di Maggio, Marco and Johnson, Mark J. and Kotter, Jason D., Who Invests in Crypto? Wealth, Financial Constraints, and Risk Attitudes (November 18, 2022). Available at SSRN: https://ssrn.com/abstract=4281330

Darren Aiello

Brigham Young University ( email )

United States

HOME PAGE: http://darrenaiello.com

Scott R. Baker

Northwestern University ( email )

2001 Sheridan Road
Evanston, IL 60208
United States

Tetyana Balyuk

Emory University - Goizueta Business School ( email )

1300 Clifton Road
Atlanta, GA 30322-2722
United States

Marco Di Maggio (Contact Author)

Harvard Business School ( email )

Soldiers Field
Baker Library 265
Boston, MA 02163
United States

HOME PAGE: http://https://www.hbs.edu/faculty/Pages/profile.aspx?facId=697248

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Mark J. Johnson

Brigham Young University - Department of Finance ( email )

Provo, UT 84602
United States

HOME PAGE: http://sites.google.com/view/markjohnson/home

Jason D. Kotter

Brigham Young University - Department of Finance ( email )

United States

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
507
Abstract Views
1,917
Rank
101,365
PlumX Metrics