Switching intention to crypto-currency market: Factors predisposing some individuals to risky investment

Abstract

We investigate factors affecting individual investors’ switching intention from traditional financial market to crypto-currency financial market. By sampling factors of individual investors related with crypto-currency (CC), the study applies structural equation modeling method (SEM) to investigate their effects on switching intention by integrating PPM and Reinforcement Sensitivity theories (RST) to form a pulling, pushing and mooring effects model. The investigation indicates that crypto-currency market can be regarded as a kind of beneficial supplement of tradition investment market for those individual investors who are with high innovativeness, reward sensitivity, knowledge and perceived risk. This study proves that the individual investors are not only attracted by significant expected return from crypto-currency but also relevant knowledge and risks disclosed by crypto-currency market regulators and distributors. The findings reinforce major roles for both market regulators and individual investors in considering and providing insights for future policy, management and investigations.