Digital Currency Risk

“…If a person makes a poor judgment and suffers a loss, they are more likely to consider that circumstance as dangerous, especially if the loss has an effect on their financial condition ( 2014), which concluded that there is a positive effect of risk perception and making an investment decision, provide evidence for this. There are many cases of people who have lost their assets and even committed suicide because of frustration that their crypto assets have experienced a significant price decline (Gilbert & Loi, 2018). Even though it has a high risk, the behavior of millennials who are known to like to have fun, have fun in their youth nowadays, many even allocate their funds to invest in Crypto (Syakir et al, 2018).…”

Section: Perceived Risk Toward Investment Decisionmentioning

confidence: 99%

Determinants of cryptocurrency investment decisions (Study of students in Bali)

Rahyuda

Candradewi

2023

Investment Management and Financial Innovations

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The investment world today is vying for profit from investing in cryptocurrencies, so this encourages young people, especially students, to invest in cryptocurrencies, but financial literacy, herding behavior, and risk perception are things that influence investment decisions. The aim of this study was to identify the factors that influence students’ decisions to invest in cryptocurrencies. The research method used is quantitative, using questionnaires distributed to students in Bali; the sample in this study was active students currently studying at universities in Bali, Indonesia, totaling 179 samples; questionnaires were distributed using the Google form and analyzed using Warp PLS. The results show that investment decisions, herding behavior, and risk perception are all significantly and positively influenced by financial literacy. Perceived risk and herding behavior have a significant influence on investment decisions. Perceived risk and herding behavior can partially mediate financial literacy on investment decisions. The influence of financial literacy on investment decisions will be stronger if it is through perceived risk with a coefficient value of 0.412 and herding behavior with a coefficient value of 0.422. Based on the study’s conclusion, it is important for investors, especially students, to prioritize improving their financial literacy before investing in cryptocurrencies. Additionally, investors should be aware of the potential impact of herding behavior and perceived risk on their investment decisions and take steps to mitigate their influence.

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“…Finally, disruptive innovations according to Christensen et al, (2015) end up replacing the established businesses. This view can't hold in terms of bitcoin since bitcoin has a limited of 21 million (Gilbert & Loi, 2018), which according to Ciaian et al, (2018), will be reached by 2041.…”

Section: Conclusion and Recommendationmentioning

confidence: 99%

“…Recent research suggested that bitcoin was the first digital currency to be decentralized and continues to be the most widely used online currency (Presthus & O'Malley, 2017). Hence, its success Bitcoin as a digital currency has attracted the attention of many academic scholars who have investigated the blockchains and digital currencies, their intrinsic value, relationship with the banking sector as well as their implications for society (Chan et al, 2017;Fiammetta & Piazza, 2017;Gilbert &Loi, 2018 andWhite et al, 2020), Customer awareness and adoption of the digital currencies (Presthus & O'Malley, 2017;Eigbe, 2018). This study aims to understand the existing literature on digital currencies and in particular the bitcoins.…”

Section: Introductionmentioning

confidence: 99%

Digital Currencies and Their Potential to Disrupt and Replace Fiat Money: The Case of Bitcoins

Wachira

2021

EJEFR

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This paper aims to investigate how digital currencies have caused a drastic evolution, especially in the payment sector. It aims to further studies on how bitcoin is the most conspicuous digital currency and is perceived as disruptive innovation with the potential of replacing fiat currency. The study was employed through a case study to examine whether bitcoins are disruptive innovation or a threat to the Central Banks and Fiat money. The study adopted a mixed approach research design by using qualitative and quantitative research approaches. The literature reviewed journals were published in credible journals in various databases. The Time series analysis approach was used to forecast the future prices of bitcoins. The study used an in-sample and out-of-sample time series forecasting using the Gretl software. The ARIMA (1,2,1) Model was found to be a good fit with 85% accuracy (the Mean Absolute Percentage Error -MAPE was 15%) to forecast the future of bitcoin prices. The outcome of the forecast suggested that bitcoin price will have a gradual but insignificant increase. The results of this study also suggest that bitcoins fail to fulfill the functions of money as a store of value, medium of exchange, and unit of account. This is attributed to high price volatility, lack of centralization, and exposure to hackers and fraudsters. The study further suggests that bitcoins are not disruptive innovations and do not pose any threat to the Central banks and the Fiat currency in the future. The results support that bitcoin can benefit the community as well as attracting investors as a speculative investment mainly because the bitcoins are limited in transactions. The study recommends more research on the potential impact of the Central bank's digital currencies on National and Global currencies particularly because China launched its digital Yuan recently. JEL: G21; E58; E51; 031; C10 Article visualizations:<img src="/-counters-/edu_01/0790/a.php" alt="Hit counter" />

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Digital Currency Risk

Cited by 22 publications

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Risks and Returns of Cryptocurrency

Risks and Returns of Cryptocurrency

Determinants of cryptocurrency investment decisions (Study of students in Bali)

Digital Currencies and Their Potential to Disrupt and Replace Fiat Money: The Case of Bitcoins

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