A study in Norway has found that less than 1 in 10 Norwegians are willing to invest in cryptocurrencies. However, the likelihood of investing is more than double in men compared to women. Additionally, those open to investing in cryptocurrency tend to exhibit lower levels of agreeableness and conscientiousness, but higher levels of openness to experience and financial overconfidence. The study was published in Psychology & Marketing.
Cryptocurrencies, also known as crypto, are digital or virtual currencies secured by cryptography. These currencies are decentralized and operate on blockchain technology—a distributed ledger that records all transactions across a computer network. Bitcoin, created in 2009 by an individual or group under the pseudonym Satoshi Nakamoto, is among the most well-known cryptocurrencies.
Cryptocurrencies enable peer-to-peer transactions without the need for intermediaries like banks, making them a potentially disruptive force in the financial world. They offer benefits such as increased security, transparency, and lower transaction fees compared to traditional financial systems. However, they also come with risks, including price volatility and regulatory concerns. Cryptocurrencies have gained popularity as both an investment asset and a means of conducting online transactions. Their use continues to evolve and expand in various industries.
“We wanted to understand the profile of crypto consumers and potential gender differences in this domain based on a representative sample of the general population instead of relying on the common approach to solely recruit convenience samples from online panels or universities,” said study author Tobias Otterbring, a professor of marketing at the University of Agder.
“Moreover, we sought to go beyond the practice of only studying the direct link between consumer gender and crypto investment decisions, with men typically being more prone to invest in cryptocurrencies than women. Instead, we tested for several plausible psychological mechanisms that might explain such gender differences. Specifically, we used measures from two distinct streams of literature, namely personality psychology and economics, to capture the Big Five personality traits and consumers’ financial overconfidence.”
Otterbring and his colleagues conducted two studies.
In the first study, 126 Scandinavian adults, ranging in age from 18 to 70, were recruited through the online platform Prolific. The participants were provided with definitions of the Big Five personality traits and were asked to assess whether individuals with higher or lower levels of each trait would be more or less likely to invest in cryptocurrencies, compared to those with opposite trait levels. The same question was posed regarding gender. Participants also shared their demographic information and their intentions or current status regarding cryptocurrency investment.
The second study aimed to validate the conceptual model derived from the first study by comparing the lay beliefs about psychological factors and cryptocurrency investment from the first study with actual observations in a larger Norwegian sample. This study involved 1,741 Norwegian adults, with an average age of 52 years, including 815 females.
In this survey, participants were questioned about their views on investing in cryptocurrencies as a viable investment option and their ownership of other types of investments. The survey also included assessments of financial literacy (via a 25-item scale), subjective financial literacy, financial overconfidence (determined by comparing financial literacy assessments with subjective financial literacy), financial self-efficacy (using a 6-item scale), and the Big Five personality traits, measured through the Ten-Item Personality Inventory.
Financial self-efficacy refers to an individual’s belief in their own ability to manage and control their financial affairs and decisions effectively. The Big Five Personality traits include neuroticism, extraversion, openness to experience, agreeableness, and conscientiousness.
The first study’s findings indicated that participants believed males, as well as individuals with higher levels of financial overconfidence and self-efficacy, were more likely to invest in cryptocurrencies. They also perceived that those less agreeable, less conscientious, less emotionally stable (i.e., having higher levels of neuroticism), more extraverted, and more open to experience would have a greater inclination towards cryptocurrency investment.
The results from the second study revealed that men scored higher on financial self-efficacy. Women were more financially overconfident compared to men, but the difference was small. “We got one unexpected result in terms of financial overconfidence, in which prior literature indicates that men tend to be more overconfident than women. In our case, however, we found the opposite: female consumers were more financially overconfident than their male counterparts,” Otterbring said.
The researchers found that 12.5% of males, compared to only 5.6% of females, regarded cryptocurrencies as a relevant investment alternative. Individuals who were more financially overconfident, less agreeable, less conscientious, and more open to experience were likelier to view cryptocurrencies as a viable investment option.
“In our main study, we found that less than 1 in 10 consumers from a nationally representative sample of Norwegian consumers were willing to invest in crypto, although men were more than twice as likely to consider such investments,” Otterbring told PsyPost. “We also found that less agreeable and less conscientious, but more open and more financially overconfident consumers were increasingly inclined to consider crypto investments. Finally, we found that our obtained gender differences, at least in part, could be explained by gender differences in financial overconfidence, agreeableness, and conscientiousness.”
The study sheds light on the links between attitudes towards investment in cryptocurrencies, gender and personality. However, it also has limitations that need to be taken into account.
“As our study was restricted to a Norwegian context, with Norway being one of the most gender equal countries in the world, it is unclear whether similar findings will emerge in less gender egalitarian countries,” Otterbring explained. “It should also be noted that we used a cross-sectional survey approach, which means that we cannot explicitly draw causal inferences based on our results.”
“In addition, we focused on mean differences between men and women in personality traits, financial overconfidence, and crypto investment intentions. However, several studies suggest that gender differences are much more pronounced at the tails of the distribution. In other words, even if researchers would only find a small mean difference between men and women, such a gender difference might still be substantial at the distribution extremes.”
The paper, “Crypto cravings: Gender differences in crypto investment intentions and the mediating roles of financial overconfidence and personality”, was authored by Ellen Katrine Nyhus, Darius‐Aurel Frank, Michał Krzysztof Król, and Tobias Otterbring.