Cryptocurrencies and Investor Disparities : A research paper about demographic factors’ effect on investment purpose and herd behavior among Swedish cryptocurrency investors

Sammanfattning

Cryptocurrencies have since the creation in 2008 constituted a unique and modern addition tothe financial setting throughout the world. Such assets are commonly known to be associatedwith great risk but also the possibility of great reward. The corresponding research field hasadapted to the evolution of cryptocurrencies and has for over a decade undergone a constantexpansion. Despite this, there is still plenty of unexplored territory within the particular researcharea and this report seeks to examine a part of it. The central topic of this paper concernscryptocurrencies in relation to Swedish retail investors’ different demographic factors and theeffect those have on investment strategy and behavior. To examine this, the report centersaround two main aspects, the investment purpose which cryptocurrency investors associatetheir investments with and investors’ exposure to herd behavior. Additionally, both aspectswere put in relation to various demographic factors to allow an analysis of whether demographicfactors affect the investors’ strategy and behavior. A quantitative method was used for theprocess of collecting data whereby a survey was constructed and replied to by Swedish retailinvestors active in the cryptocurrency market. The primary data obtained was analyzed andpresented through descriptive statistics, t-Tests, and regression models. By interpreting theresults, it was evident that demographic factors were found to not influence the investmentpurpose or the herd behavior of investors. This contradicts previous findings regardingtraditional markets e.g., the stock market where demographic factors are established as factorsaffecting both aspects. Hence, this report suggests that there are differences between thecryptocurrency market and traditional markets. Further, the research conducted in this paperindicates that a majority of investors associate cryptocurrency investments with speculativetrading and there is also a strong bias toward herd behavior among Swedish retail investorsactive in the cryptocurrency market.