New Study Discovers Investors Are Led To Crypto Trade For Thrill-Seeking vs Being Risk Seekers
A new study has discovered that investors who trade crypto's are generally prone to take more risks in the stock market as well. The study also concluded that these investors are seeking more than just diversification when they come to the crypto market, they are seeking thrills.
The new study, which was published in the September issue of Economic Letters, affirms that crypto traders are possibly driven by excitement most of the time. The paper affirms that people who engage in crypto trading seek risks and want intensive trading activity.
Tim Hasso (Bond University), Matthias Pelster (University of Paderborn) and Bastian Breitmayer (Queensland University of Technology) reunited to do this study. They took samples from 668,067 people during the timeframe of four years (2014-2017).
This new study also discovered that crypto traders used to invest in stocks using more leverage than other investors after they started to invest in the crypto market. The traders who increased their leverages the most were between 35 and 44 years-old.
Why do these investors seek crypto for a big thrill? Because cryptos have a considerably wilder market that is very volatile and can be considered unpredictable. Bitcoin can move over $1,000 USD at price in less than a day. Uncertainty is always an important element in crypto trading.
Another interesting piece of data is that these investors looked for more risky investments when the crypto market had low volatility, meaning that they simply started to take their wish for thrill and risk elsewhere.