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

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