Less agreeable and financial "overconfident" people are more likely to invest in cryptocurrency, with men constituting twice as much as women such a group, a study has revealed.
The study conducted in Norway also revealed that only less than 10 per cent of Norwegians are willing to invest in cryptocurrencies.
The research, published in the journal 'Psychology & Marketing' found that those open to crypto investments often display lower levels of agreeableness and conscientiousness, and higher levels of openness to experience and financial overconfidence. Men are more than twice as likely as women to consider cryptocurrency investments, it said.
The study was conducted in two parts, the first of which involved surveying of 126 Scandinavian adults about their views on crypto investments based on personality traits. The second study involved assessment of 1,741 Norwegian adults on psychological factors and cryptocurrency investment.
Results from the first study indicated that participants believed males, individuals with higher "financial overconfidence," and "self-efficacy" were more likely to invest in cryptocurrencies. The second study revealed that men scored higher on "financial self-efficacy," while women were more "financially overconfident."
Surprisingly, 12.5 per cent of males, compared to 5.6 per cent of females, considered cryptocurrencies a relevant investment alternative. Those who were more financially "overconfident," less agreeable, less conscientious, and more open to experience were likelier to view cryptocurrencies as a viable investment option.
The paper's corresponding author Tobias Otterbring, a marketing professor at the University of Agder, said that the research goes beyond the common approach of studying only the direct link between gender and crypto investments and examines psychological mechanisms, using measures from "personality psychology" and "economics" to capture "Big Five personality traits" and "financial overconfidence."
"Cryptocurrencies," also known as "crypto," are digital currencies secured by cryptography. They operate on "blockchain technology," a decentralised ledger recording transactions across a computer network.
"Bitcoin," introduced in 2009 by an individual or group under the pseudonym "Satoshi Nakamoto," is one of the most well-known cryptocurrencies.
While cryptocurrencies offer benefits such as increased security, transparency, and lower transaction fees compared to traditional financial systems, they also come with risks like price volatility and regulatory concerns.
In February last year, Norwegian authorities recovered $5.9 million in cryptocurrency stolen during the Axie Infinity hack, an incident connected to North Korea.
The recovery, announced by the Norwegian National Authority for Investigation and Prosecution of Economic and Environmental Crime (Økokrim), stands as one of the largest money seizures in Norway's history and notably the biggest within the cryptocurrency realm.
In May 2023, Reuters reported that Norway's central bank urged prompt action in establishing a national regulatory framework for cryptoassets. Norges Bank advised assessing the management of decentralised finance risks until a unified European regulatory framework emerges.
While Norway is not an EU member, being part of the EFTA, it's likely to be affected by EU regulations.
The EU has approved comprehensive rules for cryptoassets, requiring licensing by mid-2024. These rules include tracing transfers to combat tax evasion and money laundering.
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