The effect of financial literacy and positive feedback on investment behaviour in Bitcoin markets

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dc.contributor.advisorSickman, Mr.
dc.contributor.authorEggink, Rick
dc.date.issued2020-12-07
dc.description.abstractThe welfare loss of not participating in the stock market can be sizable. For Bitcoin investments, the relation is not so simple. There is no clear consensus in the literature, whether investors should invest in Bitcoin. There is evidence that Bitcoin is often in bubbles, but also that it provides excellent diversification possibilities. The problem that arises is that participants in Bitcoin markets are usually new to investing. These new investors do not know how to diversify their portfolio well and take too many risks when investing. The first contribution we make is showing that there is no significant effect of financial literacy on the investment amount in Bitcoin. The literature refers to positive feedback trading as one of the underlying reasons that Bitcoin is often in bubbles. Feedback trading is that investors buy assets when prices rise and sell when prices drop. The second contribution we make is showing that the amount of euro's that participants invest in Bitcoin is not significantly affected by positive feedback. The third contribution we make is showing that there is no compound effect of financial literacy and positive feedback on how much individuals invest in Bitcoin.en_US
dc.identifier.urihttps://theses.ubn.ru.nl/handle/123456789/10654
dc.language.isoenen_US
dc.thesis.facultyFaculteit der Managementwetenschappenen_US
dc.thesis.specialisationFinancial Economicsen_US
dc.thesis.studyprogrammeMaster Economicsen_US
dc.thesis.typeMasteren_US
dc.titleThe effect of financial literacy and positive feedback on investment behaviour in Bitcoin marketsen_US
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