University of Twente Student Theses


Motivations of young people in The Netherlands to invest in cryptocurrencies

Pos, Danique (2022) Motivations of young people in The Netherlands to invest in cryptocurrencies.

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Abstract:This paper investigates the motivations of young people in The Netherlands to invest in cryptocurrencies. A review of current literature is put forward, proving the limited amount of research into the domain of cryptocurrencies and cryptocurrency investment. In order to fill this gap, literature not only on cryptocurrency investment, but also equity-, bitcoin- and ICO-research as well as research on crowdfunding investment is combined and commonly recognized motivations are extracted. It is hypothesized that a total of eight motivations identified in literature significantly affect an individual’s motivation to invest in cryptocurrencies, namely the following: Financial gains, Third party influence, Shared thoughts, values and beliefs, Ideology and technology, Macroeconomic environment, Hobbyist features, Regret and Utility. Furthermore, the effect of several demographic factors is controlled for, namely gender, educational level, income level, field of study or occupation and investment experience in the cryptocurrency market. Using data of 116 respondents, Structural After Measurement (SAM) as an approach to Structural Equation Modelling is used to analyze survey results. This method of analysis is two-fold, initially testing and confirming the measurement model (measuring the variables) only after which the structural model and thus relationships between variables are reported. This approach is known to be feasible with relatively small sample sizes and prevents model convergence issues due to the previous. Additionally, a qualitative question is put forward in the survey in order to expand and nuance quantitative survey results. It is found that Financial gains, Third party influence, Ideology and technology, Regret and Utility significantly affect an individual’s motivation to invest in cryptocurrencies; the first three in a positive way and the latter two negatively. Also, diversification is put forward as a motivator in the qualitative responses. These findings contribute to the field of behavioural finance and scarce literature on cryptocurrencies and cryptocurrency investment as well as prove the feasibility of a SEM approach in this field of study. Additionally, an overview of relevant motivations to invest is put forward and firms in the cryptocurrency domain as well as investors and policymakers are provided with findings relevant to their day-to-day business (or future business). Limitations are related to the research methodology as well as the fast-paced character of the cryptocurrency market. Both verifying the results with an increased or different sample and further exploration of concepts in a qualitative way are areas for future research. Keywords: cryptocurrencies, cryptocurrency investment, investor motivations, structural equation modelling, structural after measurement.
Item Type:Essay (Master)
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:85 business administration, organizational science
Programme:Business Administration MSc (60644)
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