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Paper Number
1172
Paper Type
Complete
Abstract
This paper studies how the interplay of posting and trading behaviors within a social network influences an individual's decision to adopt new products. We focus on Bitcoin adoption, as Bitcoin comes with high uncertainty about its value and has gained increasing attention over the last few years. Due to the lack of standardized information, social media has become a main information channel for individuals to decide whether to adopt Bitcoin. Using investment opinions and actual trading behaviors from a large social trading platform, we find a pronounced social learning effect in Bitcoin adoption. Individuals are more inclined to adopt Bitcoin when their network peers do, especially when these peers' trading actions are consistent with their expressed opinions. In times of high uncertainty, investors tend to rely more on positive opinions, regardless of others' actual trading actions. Additional analyses support the notion that individuals learn from their neighbors.
Recommended Citation
Liu, Ye; Yang, Mingwen; Pelster, Matthias; and Tan, Yong, "The Interplay of Opinions and Trading Behavior: Understanding Cryptocurrency Adoption Dynamics" (2024). ICIS 2024 Proceedings. 13.
https://aisel.aisnet.org/icis2024/blockchain/blockchain/13
The Interplay of Opinions and Trading Behavior: Understanding Cryptocurrency Adoption Dynamics
This paper studies how the interplay of posting and trading behaviors within a social network influences an individual's decision to adopt new products. We focus on Bitcoin adoption, as Bitcoin comes with high uncertainty about its value and has gained increasing attention over the last few years. Due to the lack of standardized information, social media has become a main information channel for individuals to decide whether to adopt Bitcoin. Using investment opinions and actual trading behaviors from a large social trading platform, we find a pronounced social learning effect in Bitcoin adoption. Individuals are more inclined to adopt Bitcoin when their network peers do, especially when these peers' trading actions are consistent with their expressed opinions. In times of high uncertainty, investors tend to rely more on positive opinions, regardless of others' actual trading actions. Additional analyses support the notion that individuals learn from their neighbors.
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Comments
07-Fintech