Picture two college students with the same bank balance and the same class schedule. Both have heard friends talk about turning a few hundred dollars into a small fortune on a crypto exchange, and both have heard the cautionary tales about wallets wiped out overnight. One of them opens an account and buys in. The other stays on the sidelines. What separates them?
A common assumption is that the difference comes down to knowledge. Surely the person who understands interest rates, inflation, and how markets move is the one making the bold, informed bet. A study published in the Journal of Business, Communication & Technology offers evidence that the answer may have less to do with financial smarts and more to do with personality.
The question behind the research
Karima Diljan Al Balushi and Muhammad Shahid Pervez, both of Gulf College in Oman, set out to untangle two forces that usually get studied separately: what people know about money, and who they are as people. Cryptocurrencies, the authors note, are unusually risky and volatile. They are loosely regulated, technically complex, and surrounded by unverified online information. That combination makes them a useful test case for figuring out what actually drives someone to invest.
The existing research on financial knowledge and crypto is mixed. Some studies find that people who know more about finance are more likely to participate in cryptocurrency markets, while others find no connection at all. The authors argue that this inconsistency hints at something missing from the picture. Drawing on what is called Financial Capability Theory, they point out that knowing about money does not automatically translate into using that knowledge. Individual traits, confidence, and circumstances all shape whether knowledge turns into action.
To capture the “who you are” side, the researchers turned to the Big Five, a widely used model that sorts personality into five broad traits: openness to experience (curiosity and willingness to try new things), conscientiousness (carefulness and self-discipline), extraversion (sociability and energy), agreeableness (cooperativeness), and neuroticism (emotional instability and anxiety). Their guiding idea was that the type of person someone is might decide whether their financial knowledge ever gets put to use in a speculative market.
How the study worked
The team surveyed 460 university students in Pakistan, with 459 valid responses, all between the ages of 19 and 27. Pakistan was chosen because interest in cryptocurrency has grown quickly there alongside rising digital connectivity, even as investors face regulatory uncertainty and limited protections. The sample skewed male and young, and was split fairly evenly between urban and rural areas.
The survey measured several things at once. To gauge financial knowledge, the researchers separated it into three kinds. Basic objective knowledge was tested with five questions on topics like compound interest, inflation, and the time value of money. Advanced objective knowledge was tested with nine questions on things like the difference between stocks and bonds and how diversification works. For both, a correct answer scored a point and a wrong answer or “don’t know” scored zero. The third type, subjective financial knowledge, measured something different: how knowledgeable people felt they were about stocks, mutual funds, and cryptocurrency, rated on a five-point scale.
Personality was measured with a short, 10-item version of the Big Five inventory. The outcome the researchers wanted to predict was simple: a yes-or-no answer to whether a student currently held any cryptocurrency.
Because that outcome is a yes-or-no variable, the team used a method called binary logistic regression. In plain terms, it estimates how much each factor shifts the odds that someone falls into the “yes” group, while holding the other factors steady. This lets the researchers ask, for example, whether openness is linked to crypto investment even after accounting for how much someone knows about finance.
What the numbers showed
The first finding cuts against the intuitive story. Neither basic nor advanced objective financial knowledge was a significant predictor of whether students invested in cryptocurrency. Scoring well on the factual quiz, in other words, had essentially no connection to participation in this study’s sample.
Subjective financial knowledge told a different story. Students who rated themselves as more financially knowledgeable were significantly more likely to hold cryptocurrency. The relationship was statistically meaningful but modest in size, explaining only a small slice of the variation between investors and non-investors. The authors are careful to flag that this measures confidence, not accuracy. Feeling knowledgeable was linked to a higher chance of jumping in, but the study says nothing about whether those people made good decisions or earned good returns.
Personality traits carried more weight. The model built around the Big Five explained more of the difference between investors and non-investors than either knowledge model did. Three traits stood out. Openness to experience and extraversion were both positively linked to crypto investment, meaning curious, novelty-seeking, and socially energetic students were more likely to participate. Conscientiousness ran the other way: students who scored higher on carefulness and self-discipline were less likely to invest. The remaining two traits, agreeableness and neuroticism, showed no significant link once the others were accounted for.
The researchers interpret this pattern through the lens of behavioral finance. People drawn to new experiences and social engagement may be more willing to adopt an emerging and unproven financial technology, while more cautious, disciplined individuals tend to hold back from a speculative bet.
What it suggests, and what it does not
Pulling the threads together, the authors argue that in a highly speculative market like cryptocurrency, personality may be a stronger guide to who invests than tested financial literacy. That conclusion supports their starting framework: knowledge does not act on its own, and psychological dispositions help determine whether and how it gets used. They suggest the finding extends that idea by showing that in this particular high-risk setting, personality-based tendencies appeared more influential than financial literacy.
Several limits are worth keeping in mind. This was a survey of young university students in one country, recruited through convenience sampling, so the results may not carry over to older investors or other settings. The relationships are correlational. The study can say that openness and crypto investment tend to go together, not that one causes the other. And the measure of crypto investment was a single yes-or-no question. As the authors themselves stress, the study does not capture investment quality, decision accuracy, or returns. Higher self-rated knowledge was linked to a greater likelihood of participating, but that says nothing about whether participating worked out well.
The takeaway the researchers point toward is less about individual advice and more about who shapes young adults’ financial behavior. They call for collaboration among educators, regulators, and platforms to encourage responsible investing among young people, noting that simply teaching financial facts may not change behavior if confidence and personality are doing much of the steering. For anyone watching the next generation wade into digital assets, the study offers a reminder that what is in someone’s head may matter less than how they are wired to act on it.
