Sobolev, Daphne;
Kallinterakis, Vasileios;
(2024)
Risk is in the eye of the investor: Cryptocurrency investors’ engagement with risk, regulatory advice, and regulatory institutions.
Journal of Behavioral and Experimental Finance
, 44
, Article 100994. 10.1016/j.jbef.2024.100994.
(In press).
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Abstract
Despite regulators’ warnings that investing in cryptoassets is highly risky, cryptocurrency investments are prevalent. To explore investors’ engagement with regulatory risk advice, we conducted two surveys. Cryptocurrency investors residing in the UK and the US were asked about their interpretation of the notion of risk, awareness of regulatory risk advice, and attitudes towards the advice and the regulators. Investors were also asked whether they followed the advice. Qualitative content analysis of their answers suggests that people often invest in cryptocurrencies although they understand the risks involved and are aware of the regulators’ advice. They do so due to their risk propensity, self-reliance, criticism of the informativeness of the advice, or attitudes towards regulators. Furthermore, negative attitudes towards regulators often stem from lack of trust and the perception that regulators are dated. This study suggests that regulators could benefit investors by providing them with more informative advice and addressing their attitudes.
| Type: | Article |
|---|---|
| Title: | Risk is in the eye of the investor: Cryptocurrency investors’ engagement with risk, regulatory advice, and regulatory institutions |
| Open access status: | An open access version is available from UCL Discovery |
| DOI: | 10.1016/j.jbef.2024.100994 |
| Publisher version: | https://doi.org/10.1016/j.jbef.2024.100994 |
| Language: | English |
| Additional information: | © The Author(s), 2024. This is an open access article distributed in accordance with the Creative Commons Attribution Non Commercial (CC BY-NC 4.0) license, which permits others to distribute, remix, adapt, build upon this work non-commercially, and license their derivative works on different terms, provided the original work is properly cited, appropriate credit is given, any changes made indicated, and the use is non-commercial. See: http://creativecommons.org/licenses/by-nc/4.0/. |
| Keywords: | Cryptocurrency, Risk assessment, Regulation, Investor behavior, Behavioral finance, Judgment and decision-making |
| UCL classification: | UCL UCL > Provost and Vice Provost Offices > UCL BEAMS UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of Engineering Science > UCL School of Management |
| URI: | https://discovery.ucl.ac.uk/id/eprint/10198486 |
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