The role of promotion versus prevention-orientation to predict individual cryptocurrency participation

•We explore individual participation in crypto markets using Regulatory Focus Theory.•A unique survey was conducted in Denmark, Finland, and Sweden.•Promotion-oriented individuals are more likely to invest in cryptocurrencies.•Prevention-oriented investors favor safer assets. We investigate cryptocu...

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Bibliographic Details
Published in:Finance research letters 2024-09, Vol.67, p.105851, Article 105851
Main Authors: Baeckström, Ylva, Jalan, Akanksha, Matkovskyy, Roman
Format: Article
Language:English
Subjects:
Cryptocurrencies
General Finance
Individual investors
Investment decision-making
Quantitative Finance
Regulatory Focus Theory
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Summary:•We explore individual participation in crypto markets using Regulatory Focus Theory.•A unique survey was conducted in Denmark, Finland, and Sweden.•Promotion-oriented individuals are more likely to invest in cryptocurrencies.•Prevention-oriented investors favor safer assets. We investigate cryptocurrency participation within the context of Regulatory Focus Theory (RFT) among 1,519 individuals in Denmark, Finland and Sweden. Analysis of survey responses identifies the tendency for promotion-focused investors to gravitate towards the high-risk, high-reward potential of cryptocurrencies, while prevention-focused investors adopt a more cautious approach that prioritizes safer assets. Our results which demonstrate that RFT can be used to predict current and future cryptocurrency participation contribute to understanding the profile of participants in the rapidly growing cryptocurrency market.
ISSN:1544-6123
DOI:10.1016/j.frl.2024.105851