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

69 Pages Posted: 13 Nov 2023

See all articles by Darren Aiello

Darren Aiello

Brigham Young University

Scott R. Baker

Northwestern University, Kellogg School of Management, Department of Finance; National Bureau of Economic Research (NBER)

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 2023

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.

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Suggested Citation

Aiello, Darren and Baker, Scott R. 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 2023). NBER Working Paper No. w31856, Available at SSRN: https://ssrn.com/abstract=4631021

Darren Aiello (Contact Author)

Brigham Young University ( email )

Provo, UT 84602
United States

Scott R. Baker

Northwestern University, Kellogg School of Management, Department of Finance ( email )

Evanston, IL 60208
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Tetyana Balyuk

Emory University - Goizueta Business School ( email )

1300 Clifton Road
Atlanta, GA 30322-2722
United States

Marco Di Maggio

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

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