Determinants of cryptocurrency investment decisions (Study of students in Bali)
-
DOIhttp://dx.doi.org/10.21511/imfi.20(2).2023.17
-
Article InfoVolume 20 2023, Issue #2, pp. 193-204
- Cited by
- 1042 Views
-
319 Downloads
This work is licensed under a
Creative Commons Attribution 4.0 International License
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.
- Keywords
-
JEL Classification (Paper profile tab)F65, G41, E22
-
References41
-
Tables4
-
Figures2
-
- Figure 1. Conceptual framework
- Figure 2. Results of the analysis of the relationship between variables
-
- Table 1. Goodness of fit
- Table 2. Output latent variable coefficients
- Table 3. Coefficient relationship between variables
- Table 4. Indirect effect of two segments
-
- Alquraan, T., Alqisie, A., & Shorafa, A. (2016). Do Behavioral Finance Factors Influence Stock Investment Decisions of Individual Investors? (Evidence from Saudi Stock Market). American International Journal of Contemporary Research, 6(3), 159-169.
- Anbar, A., & Melek, E. (2010). An empirical investigation for determining of the relation between personal financial risk tolerance and demographic characteristic. Ege Academic Review, 10(2), 503-522.
- Anum, & Ameer, B. (2017). Behavioral Factors and Their Impact On Individual Investors’ Decision Making and Investment Performance: Empirical Investigation from Pakistani Stock Market. Global Journal of Management and Business Research, 17(1), 1-12.
- Ausop, A. Z., & Aulia, E. S. N. (2018). Teknologi Cryptocurrency Bitcoin Dalam Transaksi Bisnis Menurut Syariat Islam. Jurnal Sosioteknologi, 17(1), 74-92.
- Awais, M., Laber, M. F., Rasheed., N., & Khursheed, A. (2016). Impact of Financial Literacy and Investment Experience On Risk Tolerance and Investment Decisions: Empiral Evidence from Pakistan. International Journal of Economics and Financial Isssues, 6(1), 73-79.
- Bakar, S., & Yi, A. (2016). The Impact of Psychological Factors On Investors’ Decision Making in Malaysian Stock Market: A Case of Klang Valley and Pahang. Procedia Economics and Finance, 35, 319-328.
- Baker, H. K, & Ricciardi, V. (2014). Investor Behavior: The Psycology of Financial Planning and Investing. New Jersey: John Wiley & Sons, Inc.
- Bikhchandani, S., & Sharma, S. (2000). Herd Behavior in Financial Markets. IMF Staff Papers, 47(3), 279-310.
- Dewi, N. N. K., & Jati, I. K. (2014). Pengaruh Karakter Eksekutif, Karakteristik Perusahaan, Dan Dimensi Tata Kelola Perusahaan Yang Baik Pada Tax Avoidance Di Bursa Efek Indonesia. E-Jurnal Akuntansi, 249-260. (In Indonesian).
- Fitriarianti, B. (2018). Pengaruh Literasi Keuangan, Perilaku Keuangan Dan Pendapatan Terhadap Keputusan Berinvestasi. Jurnal Economia. (In Indonesian).
- Giesler, M., & Veresiu, E. (2014). Creating The Responsible Consumer: Moralistic Governance Regimes and Consumer Subjectivity. Journal of Consumer Research, 41(3), 840-857.
- Gilbert, S., & Loi, H. (2018). Digital Currency Risk. International Journal of Economics And Finance, 10(2), 108-123.
- Gilmore, A., Carson, D., & O’Donnell, A. (2004). Small Business Owner-Manager and Their Attitude to Risk. Marketing Intelligence & Planning, 22(3), 349-360.
- Gozalie, S., & Anastasia, N. (2015). Pengaruh Perilaku Heuristics Dan Herding Terhadap Pengambilan Keputusan Investasi Properti Hunian. Finesta, 3(2), 28-32. (In Indonesian).
- Hashemi Joo, M., Nishikawa, Y., & Dandapani, K. (2020). Cryptocurrency, A Successful Application of Blockchain Technology. Managerial Finance, 46(6), 715-733.
- Hayat, A., & Anwar, M. (2016). Impact of Behavioral Biases on Investment Decision; Moderating Role of Financial Literacy. Department of Business Administration, 1-14.
- Khalid, R., Javed, M. U., & Shahzad, K. (2018). Impact of Behavioral Biases On Investment Decision Making with Moderat-Ing Role of Financial Literacy. Jinnah Business Review, 6(2), 34-41.
- Khan, S. (2016). Impact of financial literacy, financial knowledge, moderating role of risk perception on investment decision. SSRN.
- Lammer, D., Hanspal, T., & Hackethal, A. (2019). Who Are the Bitcoin Investors? Evidence from Indirect Cryptocurrency Investments (SAFE Working Paper No. 277).
- Li, N., & Qian, Y. (2018). The Impact of Educational Pairing and Urban Residency On Household Financial Investments in Urban China. Journal of Family and Economic Issues, 39, 551-565.
- Luong, L. P., & Ha, D. T. (2011). Behavioral Factors Influencing Individual Investors’ Decision Making and Performance. Survey of The Ho Chi Minh Stock Exchange, Umea School of Business Spring Semester.
- Lusardi, A., & Mitchell, O. S. (2006). Financial Literacy and Planning Implications for Retirement Wellbeing (Pension Research Council Working Paper 1). The Wharton School.
- Mohd Noh, M. S., & Abu Bakar, M. S. (2020). Cryptocurrency as A Main Currency: A Maqasidic Approach. Al-Uqud . Journal of Islamic Economics, 4(1), 115-132.
- Ngoc, L. T. B. (2014). Behavior Pattern of Individual Investors in Stock Market. International Journal of Business and Management, 9(1).
- Nguyen, L., Gallery, G., & Newton, C. (2019). The joint influence of financial risk perception and risk tolerance on individual investment decision-making. Accounting & Finance, 59, 747-771.
- Orton, L. (2007). Financial Literacy: Lessons from International Experience (CPRN Research Report September 2007). Ontario: Canadian Policy Research Networks Inc.
- Pak, O., & Mahmood, M. (2015). Impact of Personality On Risk Tolerance and Investment Decisions International Journal of Commerce and Management Article Information. International Journal of Commerce and Management, 25(4), 370-384.
- Ramadani, T. (2022). Analisis Perilaku Milenial Terhadap Keputusan Investasi Pada Cryptocurrency (Studi Kasus Indodax Community) (Doctoral Dissertation, UIN Prof. Kh. Saifudin Zuhri Purwokerto).
- Ramadhan, T., & Mahfud, M. K. (2016). Deteksi Perilaku Herding Pada Pasar Saham Indonesia & Singapura Tahun 2011–2015. Diponegoro Journal of Management, 5(2), 96-104.
- Ramdani, F. N. (2018). Analisis pengaruh representativeness bias dan herding behavior dalam pengambilan keputusan investasi (Studi pada mahasiswa di Yogyakarta). (In Indonesian).
- Robb, C. A., & Woodyard, A. S. (2011). Finanacial Knowledge and Best Practice Behaviour. Journal of Financial Counseling And Planning, 22(1).
- Samuelson, W., & Zeckhauser, R. (1988). Status Quo Bias in Decision Making. Journal of Risk and Uncertainty, 1, 7-59.
- Setiawan, Y. C., Atahau, A. D. R., & Robiyanto, R. (2018). Cognitive Dissonance Bias, Overconfidence Bias Dan Herding Bias Dalam Pengambilan Keputusan Investasi Saham. AFRE (Accounting and Financial Review), 1(1). (In Indonesian).
- Shabgou, M., & Mousavi, A. (2016). Behavioral Finance: Behavioral Factors Influencing Investors. Decisions Making. Advanced Social Humanities and Management, 3(1), 1-6.
- Singh, R., & Bhowal, A. (2010). Risk Perception of Employees with Respect to Equity Shares. Journal of Behavioral Finance, 11(3), 177-183.
- Sitkin, S. B., & Pablo, A. L. (1992). Reconceptualizing The Determinants of Risk Behavior. The Academy of Management Review, 17(1), 9-38.
- Vieira, E. F. S., & Pereira, M. S. V. (2015). Herding Behaviour and Sentiment: Evidence in A Small European Market. Revista De Contabilidad, 18(1), 78-86.
- Vijaya, E. (2016). An Empirical Analysis On Behavioural Pattern of Indian Retail Equity Investors. Journal of Resources Development and Management, 16, 103-112.
- Williamson, Julian dan Andrew Weyman. (2005). Review of The Perception of Risk, And Stakeholder Engagement. Jurnal Health & Safety Laboratory.
- Wulandari, D. A., & Iramani, R. (2014). Studi Experienced Regret, Risk Tolerance, Overconfidance Dan Risk Perception Pada Pengambilan Keputusan Investasi. Journal of Business and Banking, 4(1), 55-66. (In Indonesian).
- Zhao, Haidong, & Zhang, Lini. (2021). Financial Literacy or Investment Experience: Which Is More Influental in Cryptocurreny Investment? International Journal of Bank Marketing 39(7), 1208-1226.