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"Bitcoin now": temporal discounting in Bitcoin holders
Mohamad El Haj1,2,3, Ahmed A Moustafa4,5
1Nantes Université, Univ Angers, Laboratoire de Psychologie des Pays de la Loire (LPPL - EA 4638), Nantes, France.
Frontiers in Neuroscience
|July 31, 2023
Summary
Short-term cryptocurrency investors, including day-traders, exhibit higher temporal discounting, prioritizing immediate rewards over larger, delayed ones for both money and Bitcoin. This contrasts with long-term investors, who show less preference for immediate gains.
Area of Science:
- Behavioral Economics
- Neuroeconomics
- Financial Psychology
Background:
- Cryptocurrency investment and trading are rapidly expanding globally.
- Understanding decision-making processes in cryptocurrency holders is crucial.
- Temporal discounting, the devaluation of future rewards, influences financial choices.
Purpose of the Study:
- To assess temporal discounting in Bitcoin holders.
- To compare temporal discounting between short-term (day-traders) and long-term investors.
- To investigate decision-making differences in cryptocurrency trading.
Main Methods:
- An online survey was administered to 144 Bitcoin holders.
- Participants completed temporal discounting questionnaires for both money and Bitcoin.
- Choices involved immediate versus delayed monetary and Bitcoin rewards.
Main Results:
- No significant differences in temporal discounting were found between money and Bitcoin.
- Short-term investors displayed significantly higher temporal discounting than long-term investors.
- Day trading activities positively correlated with temporal discounting for both assets.
Conclusions:
- Bitcoin holders with short-term investment horizons prioritize immediate rewards.
- Investor time horizon is a key factor in cryptocurrency decision-making.
- Future research could explore the neural underpinnings of cryptocurrency temporal discounting.
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