Cryptocurrency Investors Research Articles

Optimizing Cryptocurrency Returns: A Quantitative Study on Factor-Based Investing

This study explores cryptocurrency investment strategies by adapting the robust framework of factor investing, traditionally applied in equity markets, to the distinctive landscape of cryptocurrency assets. It conducts an in-depth examination of 31 prominent cryptocurrencies from December 2017 to December 2023, employing the Fama–MacBeth regression method and portfolio regressions to assess the predictive capabilities of market, size, value, and momentum factors, adjusted for the unique characteristics of the cryptocurrency market. These characteristics include high volatility and continuous trading, which differ markedly from those of traditional financial markets. To address the challenges posed by the perpetual operation of cryptocurrency trading, this study introduces an innovative rebalancing strategy that involves weekly adjustments to accommodate the market’s constant fluctuations. Additionally, to mitigate issues like autocorrelation and heteroskedasticity in financial time series data, this research applies the Newey–West standard error approach, enhancing the robustness of regression analyses. The empirical results highlight the significant predictive power of momentum and value factors in forecasting cryptocurrency returns, underscoring the importance of tailoring conventional investment frameworks to the cryptocurrency context. This study not only investigates the applicability of factor investing in the rapidly evolving cryptocurrency market, but also enriches the financial literature by demonstrating the effectiveness of combining Fama–MacBeth cross-sectional analysis with portfolio regressions, supported by Newey–West standard errors, in mastering the complexities of digital asset investments.

The crypto-market bubble burst: identifying the risk factors that prohibit cryptocurrency investments

The crypto-market bubble burst: identifying the risk factors that prohibit cryptocurrency investments

Effect of herding behavior and overconfidence bias on investor’s financial decisions: A case of investment in crypto currency in Pakistan

There are various behavioral aspects that influence the financial decisions of individual investors, such as overconfidence, herding behavior, loss aversion, and regret aversion. Other psychological elements may play a substantial influence in deciding the success or failure of any financial action. The primary aims of the present research article are to examine the effects of overconfidence bias and herding behavior on individual financial decisions regarding crypto currency investment. The markets for crypto currencies are extremely sensitive to any minute or significant changes in the economy, as well as to any changes in the individual behaviors of investors. To achieve these aims, 650 questionnaires were distributed to individual investors employed by various financial institutions, multinational corporations, including oil and gas exploration and production companies, operating in Pakistan, individual investors dealing in stocks, and students regardless of investment size. Purposive sampling was used to choose 311 valid responses from a total of 593. Those investors that engage in crypto currency investments were deemed valid responses. Classifications of investments were outlined, and demographic information was requested from respondents. SPSS-based empirical analysis provided the basis for the conclusions. The primary findings indicate that both overconfidence bias and herding tendency have a favorable and statistically significant impact on investors' financial decisions when investing in cryptocurrencies. In this study's sample, however, the majority of investors were overconfident in their crypto currency investing decisions.

The Impact of Cryptocurrency Investor Risk Perception and Awareness on the Current Uses and Future Projections of Cryptocurrencies: A Research on Istanbul Provincial Health Directorate Employees

This study investigates cryptocurrency knowledge, risk perception, and investment strategies among İstanbul Provincial Health Directorate employees. Analyzing data from 399 participants using the Cryptocurrency investment Trust Scale, which is developed by Ozyesil and Tembelo (2023), results indicate limited cryptocurrency awareness, moderate risk perception, and conservative investment tendencies. While most participants have heard of cryptocurrency, their understanding remains shalloyv, perceiving it as high-risk and favoring traditional financial instruments. The study emphasizes the necessity of educational initiatives and regulatory frameworks to facilitate safe and compliant cryptocurrency usage within the healthcare sector.

Factors Affecting Bitcoin Investment of Individual Investors

Purpose: This article clarifies the factors influencing individual investors' Bitcoin investments in the Vietnamese stock market. Design/methodology/approach: We employed the Theory of Planned Behavior (TPB) and Technology Acceptance Model (TAM), a comprehensive survey with 300 responses, and quantitative analysis using SmartPLS from December 2022 to March 2023. Findings: The findings reveal that the perceived usefulness of the Bitcoin market, subjective norms, self-efficacy, and herd behavior positively impact the Bitcoin investment decisions of individual investors in Vietnam. Research, Practical & Social Implications: This study provides regulators and relevant agencies with more practical evidence regarding the Bitcoin market, facilitating the formulation of appropriate management policies in an emerging economy. Originality/value: There is a shortage of research on the Bitcoin cryptocurrency investment market from the perspective of individual investors in emerging countries like Vietnam. Therefore, this study tries to shed light on individual investors with a comprehensive and objective overview to consider before making investment decisions. Additionally, the results can offer managers and relevant agencies empirical evidence to promulgate future regulations on the Bitcoin market.

Investigating the Impact of Financial Reporting for Cryptocurrencies on Company Value

Abstract This research focuses on investigating the impact of cryptocurrency accounting reports on company value (measured by financial performance) before and during the COVID 19 epidemic. Analyzing publicly listed companies’ data in firms’ 10-K filings, we find that there is no significant relation with the company’s profits while a company holds cryptocurrency positions. Although the issue of cryptocurrency accounting is an emerging topic, prior literature is mostly focused on cryptocurrency investment and is a rare investigation coping with the accounting treatment of crypto-assets. This paper seeks to contribute to the knowledge of fresh issues surrounding the accounting practices and standards tied to cryptocurrency for the company’s holding of crypto-assets. Taken together, the observed findings obtained from the test of the second hypothesis show that there is no significant relationship with the company’s stock returns while a company holds cryptocurrency positions. This result can be interpreted to determine whether the general investors take a more positive or negative attitude towards companies involved in cryptocurrency holding. Crucially, research findings unveil that cryptocurrency holdings have a significant impact on a company's liabilities. Our empirical evidence could be beneficial to public authorities and firms in decision- making situations related to cryptocurrency holdings of companies. JEL classification numbers: G10, G18, M14, M41. Keywords: Cryptocurrency accounting reports, Crypto-asset holdings, Firm value.

A General Framework for Account Risk Rating on Ethereum: Toward Safer Blockchain Technology

As the largest blockchain platform that supports smart contracts, Ethereum has attracted wide attention from both academia and industry in recent years. Along with the prosperous development of Ethereum, the high-risk illegal practices on it are becoming more and more rampant, seriously jeopardizing the system’s trading security and long-term development. Therefore, the detection and quantification of account risk are of great importance for both cryptocurrency investors and blockchain security researchers. In this article, we propose the first general framework for account risk rating on Ethereum, which includes a devisable suspiciousness metric to adapt to various illicit fraud detection and a network propagation mechanism to formulate the relations between accounts and transactions. By conducting extensive experiments on a real-world dataset from Ethereum, we show the universality of the account risk rating framework. Particularly, statistical analyses on different risk levels of accounts demonstrate that the risk rating framework has access to detect various illicit accounts. And the metric analysis of risk rating results put forward some insights. Moreover, visualization of a suspicious transaction chain reveals the process of illicit activities on Ethereum, enabling investors to obtain an understanding of the risky accounts and avoid significant financial losses.

Price-Volume Relationship in Bitcoin Futures ETF Market: An Information Perspective

Bitcoin futures exchange-traded funds (ETFs) are recent innovations in cryptocurrency investment. This article studies the price-volume relationship in this market from an information perspective. We first propose effective mutual information which has better estimation accuracy to analyze the contemporaneous relationship. Using half-hourly trading data of the world’s largest Bitcoin futures ETF, we find that trading volume changes and returns contain information about each other and are contemporaneously dependent. Then, we employ effective transfer entropy to examine the intertemporal relationship. The results show that there exists information transfer from volume changes to returns in most of our sample period, suggesting the presence of return predictability and market inefficiency. However, information transfer in the opposite direction occurs much less frequently, and the amount is typically smaller.

Transactions of Cryptocurrency in the Perspective of Islamic Finance and Economics

Cryptocurrency is a growing fintech trend frequently encountered in various moderneconomic activities. Therefore, this research aimed to provide knowledge and understanding of cryptocurrency, particularly from the perspective of Islamic finance and economics using secondary data obtained from literature. As a digital financial transaction system, cryptocurrency fundamentally uses relatively new technology. However, the legal nature still needs further examination without constituting a form of violation. In Indonesia, the government has yet to adopt a definitive stance on the presence of cryptocurrency, thereby permitting its usage. The results showed that cryptocurrency investment includes substantially greater risk compared to others due to the inherent challenge of predicting the value. From the perspective of Islamic finance and economics, the transactions are considered to lack clarity in terms of quality and quantity, containing elements of uncertainty (gharar). Moreover, the concept of Bitcoin as a transaction tool is forbidden (haram) by the Indonesian Ulama Council since the project contains uncertainty and does not comply with the existing regulations. The implications of the research emphasize the necessity ofavoiding dubious activities, such as cryptocurrency, as well as transactions leading to higher harm (madharat) compared to benefits, particularly from the perspective of Islamic finance and economics.

A Study on Awareness of Cryptocurrency among College Students

Cryptocurrencies have emerged as a novel form of digital asset, sparking interest and debate globally. This study investigates the awareness of cryptocurrency among college students in Ernakulam district, India. It aims to assess the level of knowledge students possess regarding cryptocurrencies, including their understanding of concepts like blockchain technology. The research explores factors influencing student awareness, such as their exposure to financial literacy programs and media coverage. The study employs surveys or interviews (method to be specified) to gather data from a representative sample of college students. By analyzing the findings, the research seeks to identify areas of knowledge gaps and shed light on students' perceptions towards cryptocurrency investment. This exploration can contribute valuable insights for policymakers, educators, and financial institutions to develop targeted initiatives that enhance financial literacy and responsible investment practices among young adults in India's evolving financial landscape.

The Role of Financial Development in Economic Growth using WPM Method

Financial development is possible investments creating information about and allocation of capital, monitoring of companies and corporate administration, commerce, diversification and risk management, accumulation and accumulation of savings, exchange of goods and services in activities like facilitation includes improvements. provided by financial institutions economic theory, at best and efficient financing institutions-banks, stock markets and bond markets-which capital it’s for high production applications paying is for economic growth beneficial. development of developing Asia strong to retain and efficient financial systems particularly important are because the performance of the investment as a driver of the region's development reduces the amount of investment. Since the early 1990s the region's financial systems are deep and diversified data indicate. 125 countries more formal econometrics on panel data quantitative analysis, financial development significant in development positive effect confirms having, especially in developing countries. of financial development in the development of the region impact than elsewhere significantly different thatno, for the asian financial crisis since then its influence has weakened the results also indicate that financial intermediaries, these teachers are bankers finance in the weakness of the sector effect of liberalization Is it a temporary effect will check that, that is, in the following years only this is observed. beginning of liberalization. this is not the case. of the banking sector weaknesses will only become apparent over time. however, in developing countries financial Liberalization Policy as an important part of the reform has Among some researchers, it is about virtues reflects overall confidence financial liberalization is that of the banking sector lead to weakness significant factor is, also of economics status even after controlling that there is this effect they found, the first one below income in the area earning funds summarize the implications the first one below review the area we do. income, cost and Savings, investment and wealth accumulation financial statements of we briefly reviewed do. The second division financial institutions orrole of intermediaries deals with The third section income, interest and money conventional theories about funding for real development between growth and development for important contacts enough attention that he did not pay some theoretical adaptations proposes and argues. The purpose of this paper is tofield-projectseveral in conjunction with the detain determinations and measurement perceived at a distance water using data for productivity mapping (WPM)methods and protocols is to create. Stock Market Investments, Real Estate Investments, Cryptocurrency Investments, Peer-to-Peer Lending and Startups and Venture Capital. Risk Management, Return on Investment (ROI), Portfolio Diversification and Costs and Fees. the Ranking of Financial development. Real Estate Investments is got the first rank whereas is the Cryptocurrency Investments the Lowest rank.

Factors Affecting the Risk Perceptions of Cryptocurrency Investors

This study explores risk perceptions in cryptocurrency investments among Indian investors. It employs a multistage random sampling survey of 228 investors. Four key factors influence this perception: conceptual clarity, investment education, awareness of investment options, and fear-induced psychological factors. The overall risk perception of crypto investors is high. Based on our findings, we suggest that the Indian government should organize an awareness campaign to create awareness and educate investors about cryptocurrency. Policymakers and investment managers should focus on transforming high-risk investors into lower-risk investors through education and support, fostering a more favorable investment environment.

What Drives People’s Cryptocurrency Investment Behavior

ABSTRACT By integrating the Self-Determination Theory and individual difference perspectives, this study examines how individual differences (i.e. locus of control, self-efficacy, and risk preference) influence behavioral intention to invest cryptocurrency through the mediation of the intrinsic and extrinsic motivations. Data collected from a sample of 305 valid responses are used to examine the research model and test the hypotheses with the employment of partial least squares structural equation modeling. The findings reveal that locus of control and self-efficacy significantly influence both intrinsic and extrinsic motivations to invest in cryptocurrencies. However, risk preference significantly impacts only extrinsic motivation. Both intrinsic and extrinsic motivations markedly influence the behavioral intention to invest in cryptocurrencies. The findings of this study provide several important theoretical and practical implications for understanding online cryptocurrency investment behaviors.

Connectedness between healthcare cryptocurrencies and major asset classes: Implications for hedging and investments strategies

This paper studies dynamic connectedness between four prominent healthcare cryptocurrencies, namely MediBloc, MediShares, Medicalchain, and Dentacoin, and bond, equity, and commodity markets along with USD and Bitcoin. The daily data span from February 2018 to April 2023. We applied the quantile VAR method and the wavelet quantile correlation approach to measure the connectedness. The quantile VAR method reveals a strengthening interrelation among the assets during COVID-19 and Russia-Ukraine military conflict, while the wavelet quantile correlation highlights the existing diversification opportunities. To test portfolio performance, we resort to minimum variance portfolio, minimum correlation portfolio and the recently developed minimum connectedness portfolio techniques. The minimum variance portfolio is best performing portfolio with highest Sharpe ratio. In addition, considering the minimum connectedness and minimum correlation portfolios, the exposure to healthcare cryptocurrencies also improves portfolio diversification. Based on the hedging effectiveness, we show that the investment in the healthcare cryptocurrencies reduces the volatility for all the selected portfolios though currently in a limited degree. However, the investors are advised to regularly monitor their asset allocation as, with the passage of time, the strength of hedging attributes may change. Our study provides important implications for policymakers and the portfolio managers.

Cryptocurrencies, Tax Ignorance and Tax Noncompliance in Direct Taxation: Spanish Empirical Evidence

This article highlights the complexity of taxation surrounding cryptocurrency transactions due to the lack of uniform regulation, creating uncertainty for both taxpayers and tax authorities. After determining the tax obligations of individuals in taxation, a survey has been conducted to assess the level of knowledge and compliance with tax obligations related to cryptocurrencies. The survey, in which 103 people participated, reveals the confusion and errors that prevail in perceptions of the tax obligations for cryptocurrencies, particularly in transactions such as swapping and staking in personal income tax. This results in almost half of the respondents (49.5%) not declaring any of their operations with cryptocurrencies. The reasons for this include the fact that the majority of respondents (66%) find the regulation of cryptocurrencies in Spain confusing and difficult to understand. Additionally, 87.4% believe that tax agencies should provide more information and resources on the taxation of cryptocurrencies and digital assets, and that there should be clearer and more comprehensive regulation. However, it should be noted that 41.7% also consider that tax regulation discourages investment in cryptocurrencies.

Bullish Sentiment on Price Upward Trend: A Netnographic Study of Cryptocurrency Communities

Cryptocurrency as a digital decentralized currency has attracted many investors and obtained a lot of support from communities. Previous studies have concluded that there were indeed connections between community sentiment and cryptocurrency price movement. However, most of the research was conducted using sophisticated methods that are difficult to utilize by cryptocurrency investors. This research objective was to find practical ways to identify bullish sentiment during price upward trend especially during the Covid-19 omicron variant outbreak that started in the last quarter of 2021. Netnography method was used as a qualitative approach for this research to get insight from cryptocurrency communities. LunarCrush web application as a more user-friendly tool, was being used to analyze bullish sentiment and price data. During December 2021 until January 2022, 303 price upward trend data from 264 coins had been collected and analyzed. The result of this research revealed 5 categories of bullish sentiment messages from top influencers which are community booster, official information, project updates, achievement, and trading plan. However, it can be concluded that price movements were not always related to bullish sentiment. Thus, bullish sentiment should not be used as the sole factor to identify price upward trends. Furthermore, investors should join the cryptocurrency community to understand the characteristics of bullish sentiment and not just rely on data from monitoring tools. Interestingly, there were no Covid-19 related topics on bullish sentiment collected. Hence, it did not necessarily need to publish good news related to Covid-19 handling to create bullish sentiment among the investors.

Examining the Drivers of Cryptocurrency Investment Intentions among Undergraduates in Malaysian Universities

This study aimed to examine the variables that affect Malaysian university students' intentions to invest in cryptocurrencies. Few studies have been conducted on the factors influencing Malaysian university students' intention to invest in cryptocurrencies, despite a wealth of research on the desire to do so. The researcher used a self-administered questionnaire to collect data for this quantitative study, which was grounded in a positivist philosophy. The target population was students who intend to invest or have invested previously in cryptocurrencies. A total of 106 respondents were obtained. The results of this study were empirically analyzed using a deductive approach and the positivist philosophy. The Statistical Product and Service Solution (SPSS) was used to process and analyze the data. The study's findings demonstrated that among the students surveyed, financial literacy, perceived trust, and social norms all had a significant impact on their intention to invest in cryptocurrencies. It was discovered, nevertheless, that their intention to purchase cryptocurrency is not significantly impacted by their perception of behavioral control. This study's value and implications stem from the insights it provides to various stakeholders in the cryptocurrency space, such as marketers, educators, and businesses engaged in the development, exchange, and creation of non-fungible tokens (NFTs). To draw in and keep the interest of potential investors, the study's findings indicate that these parties should concentrate on raising financial literacy and spreading knowledge about cryptocurrencies. The study's conclusions add to our knowledge of undergraduates' investing behavior and have applications for those involved in the cryptocurrency space.

Faktor yang Mempengaruhi Pengambilan Keputusan Investasi Cryptocurrency

This research was used to measure the influence of investment knowledge, return, risk tolerance, financial literacy, regret aversion, and overconfidence on cryptocurrency investment decisions. This research is quantitative research where the objects used are the public or active investors who invest in cryptocurrency in Indonesia. The number of samples used in this research was 101 respondents. Data collection techniques use questionnaires and data processing and hypothesis testing using Spss. The results of this research explain that the variables investment knowledge, return, risk tolerance have a positive but not significant effect on cryptocurrency investment decisions. Meanwhile, financial literacy, regret aversion, overconfidence have a significant positive effect on cryptocurrency investment decisions.

Leveraging FinTech Compliance to Mitigate Cryptocurrency Volatility for Secure US Employee Retirement Benefits: Bitcoin ETF Case Study

The integration of cryptocurrencies, particularly Bitcoin, into retirement savings plans has recently garnered significant attention. This interest has been amplified by the U.S. Securities and Exchange Commission's approval of Bitcoin Exchange-Traded Funds (ETFs) in January 2024 and Fidelity Investments' decision to include Bitcoin in their 401(k) plans. These landmark developments represent a paradigm shift in retirement investment strategies, merging traditional financial planning with the dynamic and volatile world of cryptocurrencies. The entry of Bitcoin introduces novel challenges, including increased volatility and regulatory uncertainty, necessitating a comprehensive examination of its impacts on retirement savings. The study sought to explore the role of Financial Technology (FinTech) in managing these risks and assess the adequacy of current regulatory frameworks. Employing a quantitative research approach, the study collected data from 386 participants, including FinTech practitioners and investment portfolio managers through a survey that combining closed-ended and open-ended questions. Multiple regression was used to analyze the relationships between variables such as FinTech integration, regulatory compliance, and the risk associated with cryptocurrency-inclusive retirement portfolios. The study revealed that the inclusion of Bitcoin significantly increases portfolio volatility. It also found that advanced FinTech data management techniques significantly enhance risk mitigation, while current regulatory frameworks are inadequate for governing the inclusion of cryptocurrencies in retirement plans. A comprehensive framework combining FinTech and regulatory compliance was shown to effectively reduce investment risks. The study recommends cautious consideration of cryptocurrencies in retirement portfolios, with an emphasis on assessing the risk appetite of participants. It advocates for dynamic regulatory frameworks and enhanced use of FinTech for real-time risk management. The study suggests that retirement plan providers should adopt an integrated approach, combining technological innovations with regulatory oversight, to navigate the complexities of cryptocurrency investments effectively.

Assessing the Risk of Bitcoin Futures Market: New Evidence

AbstractThe main objective of this paper is to forecast the realized volatility (RV) of Bitcoin futures (BTCF) market. To serve our purpose, we propose an augmented heterogenous autoregressive (HAR) model to consider the information on time-varying jumps observed in BTCF returns. Specifically, we estimate the jump-induced volatility using the GARCH-jump process and then consider this information in the HAR model. Both the in-sample and out-of-sample analyses show that jumps offer added information which is not provided by the existing HAR models. In addition, a novel finding is that the jump-induced volatility offers incremental information relative to the Bitcoin implied volatility index. In sum, our results indicate that the HAR-RV process comprising the leverage effects and jump volatility would predict the RV more precisely compared to the standard HAR-type models. These findings have important implications to cryptocurrency investors.