Is crypto legitimate? Study on the relationship between legitimacy and public engagement on crypto market in Indonesia

Abstract

Purpose: In recent years, the development of the crypto market has grown exponentially compared to other investment assets. Using the lens of institutional entrepreneurship theory, our research seeks to understand the antecedents of public engagement on crypto market in Indonesia. Design/methodology/approach: To capture this phenomenon, we use institutional and legitimacy theories to explain how social constructs toward cryptocurrency can be formed and accepted by society. Based on the survey of 213 individuals actively engaging in the crypto market, we confirm that public engagement in the crypto market is associated with three different types of legitimacy Findings: The main contribution of this research is that it shows that normative and cognitive legitimacies play a big role in public engagement in the crypto market. This study also found that, in general, individuals engaged in crypto are individuals who only focus on personal gain. They can engage with the crypto market if their personal goals are met. Research limitations/implications: This research is only carried out within the geographical boundaries of Indonesia. It is imperative to conduct investigations in various contexts in order to comprehend how diverse cultural contexts can potentially impact public engagement in the crypto market. Practical implications: This study provides support for the notion that public engagement in the crypto market is correlated with different levels of legitimacy. The results of this study show that public participation in the crypto market is significantly influenced by normative and cognitive legitimacies. Social implications: This research can be helpful for policymakers and industries able to consider the institutional development of crypto ecosystems and will generate fresh insight into our understanding of the nature of legitimacy-seeking behavior among cryptocurrency adopters Originality/value: We propose a new mechanism explaining how institutional frameworks could help explain the emergence of public engagement on Crypto Market.