Do You Even Crypto, Bro? Cryptocurrencies in Household Finance

60 Pages Posted: 23 May 2023

See all articles by Michael Weber

Michael Weber

University of Chicago - Finance; National Bureau of Economic Research (NBER)

Bernardo Candia

University of California, Berkeley

Olivier Coibion

University of Texas at Austin

Yuriy Gorodnichenko

University of California, Berkeley - Department of Economics; National Bureau of Economic Research (NBER); IZA Institute of Labor Economics

Multiple version iconThere are 4 versions of this paper

Date Written: May 19, 2023

Abstract

Using repeated large-scale surveys of U.S. households, we study the cryptocurrency investment decisions and motives of households relative to other financial assets. Cryptocurrency holders tend to be young, white, male and more libertarian relative to non-crypto holders. They expect much higher rates of returns for crypto and perceive it as relatively safer than do other households. They also view it as a better hedge against inflation. For those holding cryptocurrencies, changes in Bitcoin prices translate into their purchases of durable goods. Finally, exogenously-provided information about historical returns of cryptocurrencies leads individuals to increase their desired crypto holdings and makes them more likely to actually purchase cryptocurrency subsequently. We compare these views and behaviors to those of households toward other financial assets and argue that cryptocurrency is unique in many of these respects.

Keywords: Cryptocurrency, household finance, surveys

JEL Classification: E4, G5, D8

Suggested Citation

Weber, Michael and Candia, Bernardo and Coibion, Olivier and Gorodnichenko, Yuriy, Do You Even Crypto, Bro? Cryptocurrencies in Household Finance (May 19, 2023). Chicago Booth Research Paper No. 23-10, Available at SSRN: https://ssrn.com/abstract=4453714 or http://dx.doi.org/10.2139/ssrn.4453714

Michael Weber (Contact Author)

University of Chicago - Finance ( email )

5807 S. Woodlawn Avenue
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National Bureau of Economic Research (NBER)

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Bernardo Candia

University of California, Berkeley ( email )

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Olivier Coibion

University of Texas at Austin ( email )

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Austin, TX Texas 78712
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Yuriy Gorodnichenko

University of California, Berkeley - Department of Economics ( email )

549 Evans Hall #3880
Berkeley, CA 94720-3880
United States

HOME PAGE: http://www.econ.berkeley.edu/~ygorodni/index.htm

National Bureau of Economic Research (NBER) ( email )

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IZA Institute of Labor Economics ( email )

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