Testing Integrative Models of the Change Behavior in the Intention to Adopt Cryptocurrency

Risk Tolerance

Bitcoins and other cryptocurrencies have garnered worldwide notoriety as a new variant of digital assets that leverages blockchain technology as a medium of exchange (Gil-Cordero et al., 2020). However, as an asset class, cryptocurrency does possess similar volatility and momentum indicators as stocks. Liu et al. (2022) found that value and momentum strategies highly correlate across asset classes. As a result, cryptocurrency analysis and its subsequent strategies may move in lockstep with their equities market counterparts. If this is the case, the intention to adopt cryptocurrency should consider individuals’ risk preferences as it is happening in the equity market.

Abramova and Böhme (2016) quantitatively explored the multidimensional determinants of Bitcoin use, including perceived benefit and risk. The study findings corroborate the widely held belief that a broad group of people is not attracted to bitcoins because of their fluctuating value. In addition, the risk of losing money if service providers’ systems or users’ devices do not work right and the lack of consumer insurance and protection are also deterrents to adoption. The study also found that Bitcoin users are apprehensive about possible regulatory restrictions on the use of cryptocurrency.

Using consumers’ attitudes toward money, Kim (2021) used the theory of planned behavior to investigate the antecedents and behavioral intention to use Bitcoin. The study found that distrust and anxiety, among others, substantially impacted behavioral intention to use Bitcoin. Furthermore, the study findings suggest that the uncertainty and risk associated with cryptocurrency affect consumers’ choice to use the same.

An exploratory study by Smutny et al. (2021) examined the relationship between motivations and barriers to investing in cryptocurrency and risk propensity. The study found that their lack of financial experience generally puts off individuals prone to taking risks. In addition, the respondent’s opportunity to leverage cryptocurrency’s extreme volatility for speculative trading is not a motivation to invest in cryptocurrency.

Knowledge of Cryptocurrency

Arias-Oliva et al. (2021) argued that financial literacy is also essential because it is a sufficient prerequisite for rejecting blockchain technology. Like most financial and economic decisions, the intention to adopt is highly associated with an individual’s knowledge about the subject. Using financial advisors, Stolper and Walter (2017) demonstrated that literacy in understanding an asset works increases the propensity to demand it. In addition, the same study even asserted that the competence of the individual could withstand exiting or providing information, thereby lessening the like hood of just following what advice or what existing recommendations are available.

Some researchers, like Arias-Oliva et al. (2019), explored the concept of literacy in adopting cryptocurrencies. The study found that financial literacy does not influence the adoption of cryptocurrency. They explained that a consumer’s level of financial literacy might allow the individual to choose other better investments based on available information. This construct, however, focuses solely on the financial aspect of cryptocurrency. As discussed earlier, cryptocurrency adoption must incorporate the technological and economic elements of the subject of interest. Thus, the authors believe that assessing the knowledge about cryptocurrency is a better predictor of adoption than financial knowledge. (Doblas, 2019) found that cryptocurrency awareness is a significant factor in the intention to adopt cryptocurrency.

Attitude

Attitude, which refers to one’s feelings toward a particular behavior, is a predominant factor in all behavioral adoption models (Davis, 1989). However, attitude divides into instrumental and affective components in integrative models of change behavior. French et al. (2005) explained that affective attitude refers to the emotions and motivations elicited by the potential of engaging in the behavior, while the instrumental component of attitude, on the other hand, relates to a more cognitive examination of the amount to which engaging an activity might be beneficial. Therefore, considering attitude in this perspective captures the psychological and affective characteristics of adopting cryptocurrencies.

Consequently, Hwang and Moon (2019) categorically points out that cryptocurrency could provide a unique experience that feeds the desire for enjoyment. The pleasure of relatively new technology could elicit the willingness to adopt cryptocurrency. Nadeem et al. (2021) later confirmed this observation in a study conducted in China. Their study found that perceived enjoyment in cryptocurrency increases the intention to repurchase bitcoins. This observation suggests that attitude toward cryptocurrency is both psychological and emotional. Thus, the following hypotheses were derived;

Social Norms

Intimate groups, social groups, communication, and public opinion are all social elements that influence people’s motivation and attitudes toward various behaviors (Cheng et al., 2019). Social influence or norms generally affect cryptocurrency adoption in two ways. First, cryptocurrency adoption may result in social affirmations of personal achievement or prestige and the ability to recognize it as an efficient payment transaction among influential social groups (Kim, 2021). On the other hand, the opinion of others, especially family members, friends, and other influential consumers, may affirm the security of using the technology (Hwang & Moon, 2019), thereby eliciting trust and desire to adopt the technology.

The influence of social norms resonates with the (Abramova & Böhme, 2016) observation that due to its decentralized feature, social consequences, mainly the function of subjective criteria, must be considered while analyzing Bitcoin adoption and use. Consequently, when an individual sees how other members of society gain from Bitcoin in terms of social, economic, and individual benefits, their belief in the technology grows, leading to the adoption of the technology (Yoo et al., 2020). The study will not consider the social norm one-dimensional to increase explanatory power. Therefore, social norms will not regard as one-dimensional in this study. Instead, it will adopt the definition of an integrated model, covering both injunctive and descriptive norms. An injunctive example is how others feel about whether or not the research should carry out the target behavior. In contrast, the explanatory model refers to one’s perspective on whether or not others perform the intended behavior. Thus, the following hypotheses were derived;

Self-Efficacy

In the overarching models examined, the sense of how easy or difficult it is to do the goal activity is perceived as behavioral control (Ajzen, 1985). Scholars, however, found that the construct measurements are inconsistent and may even conceptualize as an over-arching predictor that needs further specification. To clarify the ambiguity of perceived behavioral control, the concept was reconceptualized over the years (Ajzen, 2002) to include self-efficacy and controllability. Pertl et al. (2010) noted that properly construed self-efficacy is the ease of performing a behavior and the confidence one possesses in behaving as desired. In addition, controllability was also constructed as an interrelation to perceived self-efficacy.

Alqaryouti et al. (2020) conducted a study to analyze the association between perceived benefits and behavior on cryptocurrency use by involving twenty-five individuals specializing in cryptocurrency. The study found that an induvial perception of ease of use is directly associated with cryptocurrency’s behavioral usage. In addition, Abramova and Böhme (2016) hypothesize that consumers regard Bitcoin as a complex and incomprehensible system that necessitates a significant amount of learning effort, particularly during the early stages of adoption. Therefore, perceived ease tends to be a significant predictor of adoption.

By examining the moderating effect of an individual’s exposure to a digital token, Huang (2019) found a significant association between experience and the tendency to hold cryptocurrencies. Individuals who have gained confidence through their experience with digital money are more likely to use and store cryptocurrencies.

A person’s perspective of technology is positive when they have a high level of optimism or control over it and are more inclined to pioneer its usage. In addition, Sobhanifard and Sadatfarizani (2019) noted that cryptocurrencies like Bitcoin technology are still in their infancy. As a result, technological discomfort caused by the uncertainty and lack of control over how the technology might develop over time may lead to the attractiveness of adopting cryptocurrency. On the other hand, the lack of control over the outcome of a technological application may lead to the deterioration of the intention to adopt. Trying new ideas necessitates taking calculated risks (Connolly & Kick, 2015). Thus, the authors derived the following hypotheses;

Mediation of Variables

The direct effects of the mentioned variables in the previous section do not limit the possibility of recursive relationships among constructs. Behavioral processes represent a complex psychological and affective behavioral and decision-making process. The perspective would imply that some of the variables, especially the main components of the behavioral model (attitude, social norms, and perceived self-efficacy), may be mediated by other latent variables, such as knowledge of cryptocurrency and risk appetite when it comes to influencing one’s intention to adopt cryptocurrency.

To illustrate, a study by Al-hussaini et al. (2019) found that consumers constantly seek a safe reputation against attackers from users with reliable experience of trust network authentication like blockchain technologies. Thus, cryptocurrency’s integration of robust public disclosure, immutability, and consensual agreement of the transactional data record mitigates the perceived risk of new technology. Similar findings of mediating tendency were found by Nuryyev et al. (2021) and Khan et al. (2017) in their studies of payment systems in hotels and banking sectors, respectively. These led the authors to argue that risk tolerance could significantly aid social influence and networks using blockchain and cryptocurrency.

According to research by Abbasi et al. (2021), roughly half of the respondents who have a solid understanding of cryptocurrencies facilitate the circumstances that impact the mentality that emphasizes the adoption of cryptocurrencies. On the other hand, there is an assumption that an individual’s motivation to adopt new technologies in the digital market depends on how well they comprehend how the system would help them accomplish a specific outcome (Miraz et al., 2022). Hong et al. (2020) demonstrated that knowledge mediates behavioral intentions in career and financial decisions and found a similarly positive role. The researcher developed the following hypotheses/paths and research framework based on the earlier studies.