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2022 Annual Conference

May 19–21, 2022

Sheraton Sand Key, Clearwater Beach, FL, US

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C2b Is Using a Financial Advisor Related to Cryptocurrency Investment?

Friday, May 20, 2022 at 10:45 AM–12:15 PM EDT
Room 2
Key Words

Cryptocurrency, Financial Advisors, NFCS Investor Survey, Investment

Short Description

Cryptocurrency investment has emerged as a popular option for those seeking financial investment. It is important for individual investors to understand the potential risks and rewards of cryptocurrency before they choose to invest in it. It also is relevant for financial advisors to understand its appeal and potential impact on their clients. While existing research has studied the cryptocurrency investment, it has not examined the important relationship between cryptocurrency investment and the use of a financial advisor. The current study focuses on that relationship. Human capital theory argues that individuals who leverage the knowledge of a financial advisor will make better financial decisions. Using the 2018 NFCS Investor survey, this paper estimates a probit model to examine the cryptocurrency investment decision of investors. It shows that investors who use a financial advisor are more likely to be invested in cryptocurrency. This implies that financial advisors may be recommending cryptocurrency investment. There are important implications from this study for current and future investment trends that carry significant volatility. As technology improves and humanity progresses, more complex and intriguing investment opportunities will become available and it will be the responsibility of investment professionals, individual investors, and regulators, to appropriately navigate the complexities.

Submitter

Alex Brockbank, Texas Tech University

Authors

Alex Brockbank, Texas Tech University
Charlene Kalenkoski, Texas Tech University
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