Cryptocurrency Exposure Linked to Increased Risk-Taking, Especially Among Financially Strained Individuals

1 May 2025

Unsplash/Kanchanara Digital coin crypto currency.

LONDON - new study from the UCD Michael Smurfit Graduate Business School has found that exposure to information about cryptocurrency significantly increases financial risk-taking, particularly among individuals experiencing low financial well-being.

Conducted by Dr. W. Yuna Yang, Assistant Professor of Marketing at UCD Smurfit, along with colleagues from the University of Oxford, the research reveals a psychological spillover effect: simply thinking about cryptocurrency can heighten individuals' willingness to engage in riskier financial behavior even in contexts unrelated to crypto itself.

The findings, drawn from three separate studies, point to a growing concern in the behavioral finance field: how emerging financial products may subtly influence consumer decision-making, particularly among vulnerable populations.

In the first study, participants read either an article on cryptocurrency or one on telescopes. Those who read about cryptocurrency were more likely to complete a word fragment (‘_uck’) as “luck,” indicating a cognitive association between crypto and chance-based outcomes. This linguistic priming suggests that individuals may view cryptocurrency less as a strategic financial tool and more as a high-stakes gamble.

The second study reinforced these findings. Participants who answered cryptocurrency-related questions prior to making unrelated financial decisions displayed a significantly higher preference for risk. This tendency was even stronger among individuals with lower self-reported financial well-being.

“Consumers who feel financially insecure are more likely to view cryptocurrency as a way out,” explains Prof. Yang. “This perception of crypto as a ‘lucky’ investment can generalize to other decisions, making these individuals more prone to risky financial behavior overall.”

The third study analyzed ten years of financial market data, focusing on the volume of cryptocurrency-related news coverage. The researchers found that spikes in crypto news correlated with higher market demand for speculative investments, such as junk bonds and volatile stocks.

This trend suggests that cryptocurrency coverage may influence not just individual behavior in controlled experiments, but also broader market dynamics, possibly driving systemic shifts in investor risk appetite.

These findings arrive amid global discussions on the need for stronger financial education and regulatory oversight in the crypto space. As cryptocurrencies remain a focal point in digital finance, their psychological influence on broader economic behavior deserves greater attention, especially as platforms increasingly target retail investors.

“Our research highlights the importance of how investment narratives, particularly those linked to high-risk assets like cryptocurrency, can disproportionately impact people who are already financially vulnerable,” says Yang.

The study underlines the growing need for financial communication that considers both the psychological and socioeconomic contexts of individual investors. As access to high-risk financial products becomes easier than ever, understanding how exposure to them shapes behavior is not just academic, it’s essential for safeguarding financial well-being.