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Financial Literacy and Risk Tolerance of Indonesian Crypto-Asset Owners

Authors:

Mohamad Ikhsan ModjoAuthors Info & Claims

ICEME '22: Proceedings of the 2022 13th International Conference on E-business, Management and Economics

Pages 297 - 306

https://doi.org/10.1145/3556089.3556119

Published: 30 November 2022 Publication History

Abstract

This paper investigates the characteristics of crypto-asset investors in Indonesia and the key factors affecting their investment decision. The authors apply the Probit model on a dataset of Indonesian equity investors collected through a primary survey. This study complements and extends the current literature of financial literacy and investment decision by providing country-specific evidence of Indonesia. Our results suggest that younger Indonesian males with higher risk tolerance and who have some previous experiences in equity investing are more likely to invest in crypto assets. In contrast, we found no significant evidence that higher financial literacy and higher income increase the likelihood to invest in crypto assets. In addition, we conclude that most crypto asset investors in Indonesia are risk-loving investors driven mainly by profit-seeking motives and willing to accept higher risk. The study sheds light on the interplay of owners' characteristics, financial literacy, risk tolerance, and how they affect investing behaviors. This study would assist the Indonesian Financial Services Authority in better regulate crypto assets investing and focus on which type of investors need to be provided with more financial education regarding the risk and return of their investment type. The second implication is that the information obtained from this research can be used by firms, brokerage, and dealers providing investment services to target better the type of investors who would be more likely to invest in crypto assets.

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Cited By

Tjondro EHatane SWiduri RTarigan J(2023)Rational versus Irrational Behavior of Indonesian Cryptocurrency Owners in Making Investment DecisionRisks10.3390/risks1101001711:1(17)Online publication date: 11-Jan-2023
https://doi.org/10.3390/risks11010017
ARDOĞAN AGÜL YSUYADAL M(2023)Financial Literacy, Behavioral Biases and Participation in Crypto Asset MarketsFinansal Okuryazarlık, Davranışsal Önyargılar ve Kripto Varlık Piyasalarına KatılımEskişehir Osmangazi Üniversitesi İktisadi ve İdari Bilimler Dergisi10.17153/oguiibf.131184118:3(880-902)Online publication date: 1-Dec-2023
https://doi.org/10.17153/oguiibf.1311841
Gerrans PAbisekaraj SLiu Z(2023)The fear of missing out on cryptocurrency and stock investments: Direct and indirect effects of financial literacy and risk toleranceJournal of Financial Literacy and Wellbeing10.1017/flw.2023.61:1(103-137)Online publication date: 28-Apr-2023
https://doi.org/10.1017/flw.2023.6

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ICEME '22: Proceedings of the 2022 13th International Conference on E-business, Management and Economics

July 2022

691 pages

ISBN:9781450396394

DOI:10.1145/3556089

Copyright © 2022 ACM.

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Published: 30 November 2022

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ICEME 2022: 2022 13th International Conference on E-business, Management and Economics

July 16 - 18, 2022

Beijing, China

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Cited By

Tjondro EHatane SWiduri RTarigan J(2023)Rational versus Irrational Behavior of Indonesian Cryptocurrency Owners in Making Investment DecisionRisks10.3390/risks1101001711:1(17)Online publication date: 11-Jan-2023
https://doi.org/10.3390/risks11010017
ARDOĞAN AGÜL YSUYADAL M(2023)Financial Literacy, Behavioral Biases and Participation in Crypto Asset MarketsFinansal Okuryazarlık, Davranışsal Önyargılar ve Kripto Varlık Piyasalarına KatılımEskişehir Osmangazi Üniversitesi İktisadi ve İdari Bilimler Dergisi10.17153/oguiibf.131184118:3(880-902)Online publication date: 1-Dec-2023
https://doi.org/10.17153/oguiibf.1311841
Gerrans PAbisekaraj SLiu Z(2023)The fear of missing out on cryptocurrency and stock investments: Direct and indirect effects of financial literacy and risk toleranceJournal of Financial Literacy and Wellbeing10.1017/flw.2023.61:1(103-137)Online publication date: 28-Apr-2023
https://doi.org/10.1017/flw.2023.6

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