Bitcoin investment: a mixed methods study of investment motivations

ABSTRACT

Bitcoin is a well-established blockchain-based cryptocurrency that has attracted a great deal of attention from media and regulators alike. While millions of individuals invest in bitcoin, their motivations for doing so are less clear than with traditional investment decisions. We argue that the technical nature of bitcoin investments gives it unique characteristics and, consequently, that we lack a thorough understanding of how this affects the motivations behind bitcoin investment. We use a mixed method approach consisting of qualitative (n = 73) and quantitative (n = 150) studies and fuzzy-set qualitative comparative analysis (fsQCA) to identify seven bitcoin-specific motivations (profit expectancy, ease of bitcoin acquisition, support of bitcoin ideology, investment skills, risk affinity, anticipated and experienced inaction regret) and how configurations of them explain bitcoin investment. The findings reveal, among others, that some individuals invest in bitcoin because they support the bitcoin ideology. Contrary to the traditional investment literature, profit expectancy is not a necessary condition to the extent that there is one empirical configuration of motivations that explains that individuals also invest in bitcoin even if they do not expect profits. The results disclose non-trivial investment motivation configurations and lay the groundwork for future studies of the role of cryptocurrencies in society.

ACCEPTING EDITOR:

• Pär Ågerfalk

ASSOCIATE EDITOR:

• Jason Thatcher

KEYWORDS:

• Cryptocurrency
• bitcoin
• blockchain
• investment
• regret theory
• fuzzy-set qualitative comparative analysis (fsQCA)

Disclosure statement

No potential conflict of interest was reported by the authors.

Supplementary material

Supplemental data for this article can be accessed here.

Notes

1. We capitalise Bitcoin when referring to Bitcoin as an ecosystem. We refer to the Bitcoin blockchain application when talking about the protocol and the payment network. We write bitcoin with a lowercase “b” when referring to the cryptocurrency.

2. Prices based on the market price from June 2 2020.

3. Prices based on the market price from June 2 2020.

¹We refer to reward based crowdfunding and equity based crowdfunding, but not to donation based or lending-based crowdfunding, which per se is completely different from investment (Vismara 2018; Hoegen et al. 2018). For the reason of simplicity, we only refer to the term crowdfunding.