The primary goal of this study is to investigate the relationship between the characteristics of financial investors and the likelihood of being cryptocurrency investors, aiming to open the black box of cryptocurrencies. The inherent anonymity associated with cryptocurrencies limits our knowledge of understanding the characteristics of cryptocurrency investors. By examining the association between factors related to financial literacy, investment knowledge and experience, and the likelihood of an investor investing in cryptocurrencies, we aim to shed the on the profile of cryptocurrency investors. These findings contribute both to academic literature on behavioral finance and fintech adoption, and to the development of more targeted and effective practices in investor education and financial advising.
Our study contributes to the growing body of cryptocurrency research by offering new insights into the characteristics of cryptocurrency investors. Understanding who invests in cryptocurrencies is critical, as the traditional investors may be hesitant to enter the cryptocurrencies market, limiting the opportunity for them to reap the financial benefits of cryptocurrencies rapid growth. This hesitation can be attributed to individual herding behavior, as the existing research has pointed out (Li & Wu, 2018; Sun, 2013), where individuals are influenced by the success stories of others. Our findings show that investment knowledge and experiences play an important role in becoming a cryptocurrency investor. The findings suggest that experienced and knowledgeable investors may feel more comfortable venturing into the relatively new and volatile realm of cryptocurrencies. We found that having investment experience in risky assets such as stocks, commodities, features, and options is related to a higher likelihood of investing in cryptocurrencies. Moreover, investment experience is also the most pronounced covariate with a connection to cryptocurrencies compared to other variables examined in this paper. Indeed, cryptocurrencies, in general, are viewed as a high-risk investment asset. This aligns with the general view that cryptocurrencies are high-risk investment vehicles, and therefore tend to attract individuals who are already comfortable managing financial risk (Hala et al., 2020; Wärneryd, 1996).
Furthermore, cognitive research indicates that experienced investors are typically more confident (Hoffmann & Post, 2016) and are more willing to explore new investment options such as cryptocurrencies (Nguyen, 2019). These findings contribute to the literature by challenging the common perception that cryptocurrency markets are dominated primarily by speculative or inexperienced traders (Fujiki, 2021; Hadan et al., 2024). Instead, our evidence suggests that the market is also drawing seasoned investors with diverse investment portfolios.
Also, the results from regression analysis show that age negatively moderates the association between investment knowledge and cryptocurrency investment, especially noting that individuals older than 44 are less inclined toward cryptocurrency investments than those younger than 34. Surprisingly, our findings also indicate that while a higher level of investment knowledge relates to a greater chance of investing in cryptocurrency, investment knowledge does not play the same role in becoming a cryptocurrency investor for different age groups, highlighting the possible generational divide in investment preferences, as the younger investors are more likely to embrace new and riskier investment forms. This finding ties well with a mix of literature studying the influence of age on investment behaviors (Beck et al., 2023). For example, Charles and Kasilingam (2013) found that investors gradually reduce their investment portion in the equity market and tend to choose less risky investment options as they grow older. This could be explained by their increasing family responsibility as age increases, which makes them more cautious when making investment decisions (Lee et al., 2010). Likewise, prior literature has found that investment risk tolerance levels often vary based on the age of investors and that younger investors are usually more inclined to choose riskier assets in contrast with older investors when making investment decisions (Dickason & Ferreira, 2018). Since cryptocurrencies are high-risk financial instruments, it is possible that older investors are less likely to invest in them due to their investment risk preferences. Therefore, we call for future research on understanding the broader shifts in attitude toward financial technologies across various age groups.
Different from the existing studies that have documented a significant association between financial literacy and cryptocurrency investment (Fujiki, 2021; Gignac et al., 2023; Zhao & Zhang, 2021), this paper shows that financial literacy is not related to investing in cryptocurrencies. However, this does not mean that the findings from the present study contradict those from prior literature. Instead, the surprising finding of this study is the negative relationship between education level and cryptocurrency investment, indicating that individuals with lower levels of formal education are more likely to invest in cryptocurrencies. These surprising findings challenge the traditional view that higher education correlates with a greater propensity for investment in fintech markets. This suggests that financial literacy, typically acquired through formal education, may no longer be a critical factor in becoming a new fintech investor. In addition to that, it is worth noting that the insignificant linkage between cryptocurrency investment and financial literacy could be attributed to the nature of the sample used for analysis. Our study utilizes data from the National Financial Capability Study 2021, which includes responses from 1810 financial investors nationwide. Therefore, it is possible that investors in this sample share a similar level of financial literacy, and the small variation in financial literacy among investors in the sample is not enough to yield statistically significant results. Therefore, further investigation is needed when more data is available in the future, and we call for future research to conduct a more in-depth investigation into how financial literacy may influence individual financial investment decisions.
From a practical standpoint, our research also makes several contributions. First, our findings can guide financial advisors, service providers, and fintech platforms in identifying which segments of investors are most likely to engage with crypto products. Specifically, investors with a background in managing risky assets may be more receptive to targeted crypto offerings and stand to benefit from tailored education on managing crypto-related volatility and risks. These insights can help bridge the gap between traditional finance and emerging digital assets by equipping institutions to engage the right audience more effectively.
Second, since investment knowledge is more influential for younger investors than for older ones, crypto education programs should be tailored to different age groups. For instance, while there is no doubt that cryptocurrencies have become popular investment assets in recent years, they are significantly more volatile compared to conventional financial instruments. Since the positive association between cryptocurrency investment and investment knowledge diminishes as age increases (Kim & Fan, 2025; Luo et al., 2025), investment education in early life may be more effective in helping develop a healthy and beneficial investment habit regarding cryptocurrency investment. Therefore, educating young investors about the potential risks of cryptocurrency investment is essential. Especially, our study found that financial literacy has no impact on becoming a cryptocurrency investor, and this non-significant association may imply that existing financial literacy initiatives, especially those grounded in formal education, may be insufficient to influence crypto behaviors. This finding indicates the need for universities to consider promoting applied, hands-on financial education that focuses on simulation-based learning rather than purely conceptual financial knowledge. For instance, financial educators and advisors can develop age-specific content, such as using gamified and exploratory formats for younger users, as young adults are more likely to be engaged by gamified learning approaches rather than traditional lecture-based instruction (Buckley & Doyle, 2016; Li et al., 2025).
The present study is not without limitations. First of all, since the data adopted in the present study is cross-sectional, this paper focuses on identifying associations between variables rather than making a causal argument. Future research may examine the causal effect of variables on cryptocurrency investment when panel data is available (Heise, 1970). It is also worth noting that the data collected from the NFCS 2021 are self-reported, which means that responses could be either over- or under-reporting. This limitation may introduce social desirability bias, where respondents tend to provide responses in ways that are more acceptable or favorable to themselves, resulting in understating risky behaviors or overreporting positive financial habits. In addition, non-response bias may arise if individuals who choose not to participate in the survey differ systematically from those who do, which could limit the generalizability of the findings. Future research using a panel dataset, which allows between-time comparisons, could help validate these results and reduce such biases.