Welcome to another special episode of Rational Reminder Podcast, a show to help us learn about cryptocurrencies and their role in our current and future financial systems. In today's show, we speak to Tobin Hanspal, an Assistant Professor of Finance at the Vienna University of Economics and Business who has written several papers focused on household finances. Tobin's research area offers insights into the behaviours of retail investors in the crypto space and how this may affect household finances. In this episode, we take a deep dive into some of the papers that Tobin has authored and how his findings relate to the behaviours and biases of crypto adopters. We discuss the investment behaviours of early crypto adopters, the role of EFTs in reducing risk, the different types of investor groups, how past experience negatively affects investor confidence, how behaviours change after an initial crypto investment, the disposition effect, how cryptocurrencies are an extension of existing behaviours, and much more! Be sure not to miss out on this informative episode with expert, Tobin Hanspal!
Key Points From This Episode:
- How Tobin investigated the investment behaviour of early crypto adopters. [0:04:24]
- Whether indirect crypto investments are a good proxy for crypto investors. [0:08:10]
- Why it is important to consider the different types of investor groups. [0:10:23]
- The differences between individual characteristics of crypto adopters and non-adopters. [0:10:55]
- Comparison of eventual crypto adopters and non-adopters [0:12:37]
- What kind of sector ETFs do crypto adopters choose to invest in. [0:13:48]
- Differences between the crypto and non-crypto investors, in terms of typical investor behaviour biases. [0:15:01]
- How cryptocurrencies are an extension of traditional high-risk investing. [0:16:39]
- Whether the behaviour of investors changes after their first crypto investment. [0:17:37]
- The differences in behaviour between early and late adopters. [0:19:15]
- What insights Tobin has regarding the geographical location of crypto adopters. [0:20:36]
- What percentage of their portfolios’ do adopters allocate to crypto. [0:21:11]
- Find out if crypto investors buy lower-risk assets to make up for cryptocurrencies. [0:21:36]
- What differences exist between crypto and non-crypto investors regarding efficiency. [0:22:51]
- Description of the typical crypto investor characterized in their study. [0:23:39]
- Tobin explains the disposition effect and how belief systems play a role. [0:25:56]
- How risk appetite is related to the disposition effect. [0:28:05]
- People’s beliefs: are expected returns affected by past experience in expected realized returns. [0:29:20]
- Whether positive or negative realized past return experiences have the same effect on beliefs. [0:31:19]
- How peoples’ beliefs affect investing in riskier assets. [0:32:07]
- Changes in behaviour on a household level from past negative investment experiences. [0:33:23]
- The role experiences of peers and/or relatives have on investment belief. [0:38:16]
- Reasons for people reducing risk in their portfolios. [0:38:50]
- Tobin shares if he thinks cryptocurrencies will have similar effects on peoples’ behaviours. [0:39:42]
- How applicable the findings are from Tobin’s study to other parts of the world. [0:41:54]
- What the ideal theoretical response is to losing money on an investment. [0:42:47]
- Important takeaways that Tobin has for crypto investors. [0:43:23]
