NEW DELHI: The world of cryptocurrencies is very dynamic. Research paper ‘Distrust or Speculation? The socioeconomic drivers of US cryptocurrency investments’, published in July 2021 reveals many useful findings about the sociodemographics of cryptocurrency usage in the US.
The research conducted by Raphael Auer of the Bank of International Settlements (BIS) and David-Tercero Lucas of the Autonomous University underscored following important conclusions in the American context:
* The research found that men have a higher propensity to invest in cryptocurrency than women. A gender gap was seen in terms of cryptocurrency ownership.
* Levels of education and income, digital financial experience gained from using debit and credit cards, using a mobile app to pay for products also played an important role in orienting the choice of cryptocurrency.
– Owners of XRP and ether are the most educated ones, followed by Bitcoin Cash and Bitcoin users.
– Owners of XRP, Ether and Stellar are the highest earners while Bitcoin investors earn the least.
– Litecoin owners are the least educated.
* Gender and age were found to be unrelated to differences in knowledge about crypto technology.
* Owning a cryptocurrency in one year increases the probability of owning a cryptocurrency in the next year by 50 percent on the basis of an empirical test hodling, which is a misspelling of the word holding means buying and holding cryptocurrency for a longer period.
* Cryptocurrencies are not treated as alternatives to fiat currency but rather as a niche digital speculation object.
The research done by Auer and Tercero used the Federal Reserve’s survey data as base. The pool of investors in cryptocurrencies in the US has increased dramatically by 2020 with nearly 4 per cent Americans having cryptos in their portfolio than 1.4 per cent in 2019 as per Federal Reserve survey.
Charles Randell, the chair of Britain’s Financial Conduct Authority, had warned that the hype and frenzy surrounding digital currencies could lure customers into such fraudulent investments and thus the need for regulation. The crux of the research by the Auer-Tercero duo is also to have cryptocurrency regulations since the objectives of investors in cryptocurrency are the same as those for the asset classes.
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