Overview
Few areas of the finance industry have attracted as much attention recently as cryptocurrency. Also known as “crypto,” many fans of FinTech (financial technology) have become enamored with blockchain-driven cryptocurrencies like Bitcoin, Ethereum, and Dogecoin.
To its fans, crypto is the greatest thing since sliced bread securities. Others just want to stop hearing about it. The enthusiasm by some in the crypto community has attracted euphemisms like “crypto bro.” But such is also the case in the investing world more generally, with terms like “finance bro.”
This led us to an intriguing question. Are crypto fans perceived more harshly than traditional investors?
Experiment
We had 400 people on Amazon Mechanical Turk participate in a hypothetical scenario in which a new co-worker mentions his passion for crypto or the more traditional investing in stocks (randomly assigned). We then asked these participants how much they liked this new co-worker.
Participants were told the following.
"A new co-worker is starting a conversation with you about hobbies, and he mentions that he’s a big fan of the [stock market (investing in companies like Boeing and Express) / crypto (investing in cryptocurrencies like Bitcoin and Ethereum). He then proceeds to tell you about how to invest in [the stock market / crypto]."
Participants were then asked, “How much do you like this person? (1 = Not at all, 7 = Very much)” using a 1-7 scale.
Results
Unfortunately for crypto fans, participants liked our hypothetical crypto investor less (avg. = 4.53) than our traditional stock market investor (avg. = 4.84), (p = 0.041). And this difference didn’t seem to be affected by gender (p = 0.687) or age (p = 0.983). However, the difference was quite small, only about a fifth of a standard deviation, which is a bit smaller than most of the statistically significant differences we find.
Conclusion
If you’re a crypto-evangelist, you may incur a small social loss when trying to persuade others to buy into blockchain. But crypto is relatively new, not to mention volatile. It will be interesting to see how this perception changes in the next several years.
Methods Note
To test for significant differences in likability between our experimental conditions, we used an independent samples t-test. For statistically significant results, the difference between the averages of the two groups would be large, and the corresponding “p-value” would be small (p < 0.05). This indicates that if we were to replicate the study with the same population, we would likely obtain a similar effect. Additionally, we utilized OLS regression analyses with interaction terms to explore potential significant interactions between the main results and participant demographics, such as age and gender.
Data and survey materials used for this experiment are available upon request.