Until the end of December 2018, Bitcoin was declared to be dead 338 times. Besides strong representation in media and public discussion, the cryptocurrency went through the ripple effect resulting in a peak of 19,871 $/BTC on December 17, 2017, followed by a dramatic devaluation resulting in a price of 3,896 $/BTC on December 31, 2018. The cryptocurrency is related to high volatility, strong herd behavior and bounded rationality. But to what extent does the perception of risk in investment’s context differ from Bitcoin and other investments?
In the following paper, the technical implications and a brief historical development are provided in the second chapter. In the third chapter, the mainstream literature on investment behavior, risk aversion and measuring instruments for risk aversion is reviewed. In order to approach the research question, an online-survey among students is conducted which is presented in the fourth chapter and evaluated in the fifth chapter. In the last chapter, both the research method and the results are critically reflected and an outlook on future developments is given.
Inhaltsverzeichnis (Table of Contents)
- INTRODUCTION
- BITCOIN – TECHNICAL IMPLICATIONS AND HISTORICAL DEVELOPMENT
- THE BEHAVIOUR OF BITCOIN INVESTORS
- THE REPRESENTATION OF UTILITY IN THE INDIVIDUAL'S DECISIONS
- HERD BEHAVIOUR AND COLLECTIVE IRRATIONALITY
- RISK AVERSION AND CHOICE'S PREFERENCES
- EXPERIMENTAL SETUP
- METHODOLOGY
- HYPOTHESES
- QUESTIONNAIRE DESIGN
- EVALUATION
- REFLECTION
- APPENDIX
- FIGURE APPENDIX
- TABLE APPENDIX
- REFERENCES
- QUESTIONNAIRE
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This seminar paper explores the extent to which the perception of risk from investments and Bitcoin investments differ. It aims to analyze the behavior of Bitcoin investors, focusing on their decision-making processes and the factors influencing their risk perception.
- The technical implications and historical development of Bitcoin
- The representation of utility in individual investment decisions
- Herd behavior and collective irrationality among Bitcoin investors
- Risk aversion and choice preferences in the context of Bitcoin investments
- An experimental setup designed to study the differences in risk perception between traditional and Bitcoin investments
Zusammenfassung der Kapitel (Chapter Summaries)
The introduction sets the context for the research by discussing the growing popularity of Bitcoin and the need to understand the underlying factors influencing investor behavior. The second chapter provides a technical overview of Bitcoin, including its historical development, technical features, and key principles.
The third chapter focuses on the behavioral aspects of Bitcoin investment, exploring the role of utility representation in individual decisions, herd behavior, and collective irrationality, as well as risk aversion and choice preferences. The experimental setup is described in the fourth chapter, outlining the methodology, hypotheses, and questionnaire design used to collect data from a sample of investors.
Schlüsselwörter (Keywords)
The main keywords and focus topics of this seminar paper include Bitcoin, investment risk perception, investor behavior, utility representation, herd behavior, collective irrationality, risk aversion, choice preferences, and experimental methodology.
- Quote paper
- Anonym (Author), 2019, To what Extent does the Perception of Risk from Investments and Bitcoin Investments Differ? Insights From a Choice Experiment, Munich, GRIN Verlag, https://www.grin.com/document/1034394
