According to new research published in Computers in human behavior. The new study provides insight into some of the psychological patterns that characterize heavy cryptocurrency users.
Cryptocurrency is a digital asset designed to act as a medium of exchange that uses strong cryptography to secure financial transactions, control the creation of additional units, and verify the transfer of assets. Bitcoin, the first and most well-known cryptocurrency, was created in 2009. Since then, cryptocurrencies have become increasingly popular. But prices can fluctuate quickly, and investing in cryptocurrencies carries significant risk.
The risk-taking aspect of cryptocurrencies has led researchers to examine the possible link between cryptocurrency trading and problem gambling. Study author Fred Steinmetz noted that trust in cryptocurrencies and ideological motivations can play a significant role in cryptocurrency usage. Additionally, little is known about cryptocurrency users who also gamble
“Since the beginning of my research journey in 2015, my research topics have included blockchain technology, cryptocurrencies and gambling. It made sense for me to start researching the intersections between these topics,” said study author Fred Steinmetz, co-founder of the nonprofit Blockchain Research Lab and author of “Blockchain and the Digital Economy: The Socio-Economic Impact of Blockchain.” Technology.”
For his study, Steinmetz analyzed a representative sample of 3,864 Germans about their use of cryptocurrencies and their involvement in gambling in the past year. The data was collected in 2019.
Participants were categorized into four distinct groups: there were 1,844 non-users (who have never played or used cryptocurrencies), there were 1,312 players (who had recently played but never had crypto), was 708 crypto users (who at one time owned crypto but hadn’t played recently) and there were 435 crypto gamblers (who had cryptocurrency at one point and had also gambled recently).
Cryptogamers reported having significantly higher levels of knowledge about blockchain technology along with higher levels of trust in cryptocurrencies. Crypto gamblers were also significantly more likely, compared to regular cryptocurrency users, to view their cryptocurrency ownership as ideologically motivated.
“Cryptocurrency is not just about trading alternative financial assets. In contrast to, e.g. stock trading, cryptocurrency users experience a different mental engagement that relates to the narratives and ideologies that permeate the industry,” Steinmetz told PsyPost. “Gambling-related cryptocurrency users are more mentally, proactively, and financially involved than nongambling users.”
Additionally, crypto gamblers tended to be younger, more likely to be male, more educated, and better off than non-gambling cryptocurrency users. “The profiles of crypto-gamblers resemble those of skill-based gamblers and stock traders, but differ in their average young age,” Steinmetz wrote in his study.
Crypto gamblers were further analyzed into three distinct clusters. One cluster consisted of individuals with high ideological motivation and trust in cryptocurrencies and a moderate level of financial investment who used their cryptocurrency to speculate relatively infrequently. The second cluster had high ideological motivation and trust, a high level of investment, and often engaged in cryptocurrency speculation. The third cluster consisted of crypto gamblers with low ideological motivation and trust, low levels of investment, and low levels of cryptocurrency speculation.
“Among cryptocurrency users who also gamble, I identified a group that includes heavy users, who are highly engaged and possibly considering substitutes for cryptocurrency and gambling,” Steinmetz told PsyPost. “Interactions between the investigated variables suggest that high levels of intellectual engagement among cryptocurrency users who also gamble induce higher engagement in terms of owning more cryptocurrency and gambling more often.”
The second group of heavy users represented a significant share of crypto-gamers. “An unexpected share of ~35% heavy users among all cryptocurrency users who also gamble. This warrants further research in the field,” Steinmetz said.
“The results suggest that instead of focusing solely on cryptocurrency transaction frequencies, researchers should broaden their scope by recognizing the importance of the cognitive engagement of cryptocurrency users, e.g.
The study, “Cryptocurrency and Gambling Interactions: Results from a Representative Survey,” was published online on August 22, 2022.