Crypto Trading and Bitcoin Prices : Evidence from a New Database of Retail Adoption
Prices for cryptocurrencies have undergone multiple boom-bust cycles, together with ongoing entry by retail investors. To investigate the drivers of crypto adoption, we assemble a novel database (made available with this paper) on retail use of crypto exchange apps at daily frequency for 95 countries over 2015–22. We show that a rising Bitcoin price is followed by the entry of new users. About 40% of these new users are men under 35, commonly identified as the most “risk-seeking” segment of the population. We confirm these findings by exploiting two exogenous price shocks: the crackdown of Chinese authorities on crypto mining in mid-2021 and the social unrest in Kazakhstan in early 2022. Moreover, we find that when prices rise retail investors buy, while the largest holders sell — making a return at the smaller users’ expense. Overall, back of the envelope calculations suggest that around three-quarters of users have lost money on their Bitcoin investments.
| Medienart: |
E-Book |
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| Erscheinungsjahr: |
2023 |
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| Erschienen: |
S.l.: SSRN ; 2023 |
| Reihe: |
CESifo Working Paper - No. 10266 |
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| Sprache: |
Englisch |
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| Beteiligte Personen: |
Auer, Raphael [VerfasserIn] |
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| Links: |
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| Themen: |
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| Anmerkungen: |
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments 2023 erstellt |
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| Umfang: |
1 Online-Ressource (28 p) |
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| doi: |
10.2139/ssrn.4357559 |
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| funding: |
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| Förderinstitution / Projekttitel: |
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