The effect of interest rates on traditional and cryptocurrency investments
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2022-07-11
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en
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This paper examines the effect of changes in the interest rate on the behaviour of traditional and cryptocurrency investors. To test whether an increase in the interest rate leads to a decrease in cryptocurrency investments and if this effect is greater for cryptocurrency investors than for traditional investors. In an experiment, participants were divided in a cryptocurrency and traditional asset group and were given four portfolio allocation decisions. Each portfolio allocation decision used a different interest rate and asked to allocate funds between savings against the interest rate and a risky assets, either Bitcoins or AEX stocks. The results display that a change in interest rate does not lead to a change in traditional and cryptocurrency investments. Therefore, there is no difference between traditional and cryptocurrency investors in their reaction on the change of interest rates.
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Faculteit der Managementwetenschappen