What are differences between cryptocurrency investors and traditional investors?
Best insight from top research papers
Cryptocurrency investors differ from traditional investors in various aspects. Cryptocurrency trading can exhibit pathological and gambling-like behaviors due to its high volatility and speculative nature, with a significant portion of traders showing impulsivity and potential addiction traits . In contrast, traditional investors face cognitive constraints when choosing optimal portfolios, often resorting to mental shortcuts due to the overwhelming number of asset combinations . Institutional investments play a crucial role in the cryptocurrency market's evolution, with market capitalization highly correlated to institutional investment size, indicating their significant influence . Additionally, while traditional investors focus on established markets like mutual funds and stocks, cryptocurrency investors navigate a newer and more volatile market, requiring different strategies and risk management approaches .
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| Papers (4) | Insight |
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| Not addressed in the paper. | |
18 Feb 2022 | Cryptocurrency investors tend to embrace new trends like ICOs, while traditional investors focus on mutual funds and established markets, as highlighted in the paper. |
05 Jan 2023 | Cryptocurrency investors tend to specialize in specific technologies, while traditional investors may invest more broadly. Specialization and focus on particular technologies distinguish cryptocurrency investors. |
| Cryptocurrency investors face complexity due to over 10,000 options, leading to heuristic decision-making, unlike traditional investors who deal with fewer choices and may follow more traditional investment strategies. |
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