Information problems and investor behavior in the cryptocurrency market in Thailand

Millions of cryptocurrency investors in Thailand encounter information problems such as information overload and information intermediaries, resulting in uninformed or misinformed investment decisions. Unintelligent trades and excessive speculation will make cryptocurrency prices volatile, affecting a wide range of stakeholders in the crypto economy. To ensure the production flow and sustainability of the crypto economy, policy makers should consider appropriate legal measures to address information problems and enhance investment decisions. In avoiding excessive regulations that could stifle innovation and restrict market access, policy makers should strive to adopt a balanced approach supported by behavioral and empirical evidence, with the aim of promoting sustainable growth and benefiting all stakeholders. Despite the recent adoption of certain measures and the forthcoming implementation of others, verifying their effectiveness in addressing information problems and investor biases through experimental studies is essential, as real-world data is currently unavailable. Such experiments provide timely insights into the maturity of the cryptocurrency ecosystem in Thailand, which will, in turn, guide regulatory recommendations. Rather than relying on data from exchanges that may be subject to market manipulations, this research directly collected information from investors in Thailand through two survey experiments, offering valuable behavioral and empirical evidence on the potential impact of these rules if implemented in Thailand. The first study reveals that most respondents identify themselves as "hodlers" and prioritize information types like market/price trends and adoption/use cases. Whitepapers are the most widely used information source (71.75%), followed by blockchain developers (43.75%) and online discussion platforms (33.75%). Among different measures (crypto-investing experience, general-investing experience, investor sophistication, mandatory disclosure, and harsh anti-market manipulation rules), crypto-investing experience has the most influence on investor reliance on information. The more crypto-investing experience investors have, the less they rely on alternative information sources. In the second study, over half of the participants (50.67%) identify themselves as "hodlers." The study looks at herding behavior using trading volumes and prices and finds that only 15% of subjects exhibited herding behavior. It suggests that following trading volume may not be a primary concern for policy makers. Among different measures (crypto-investing experience, general-investing experience, and investor sophistication), the study recommends using investor sophistication tests for investor protection as more sophisticated investors tend to herd less. The tested warning message does not effectively reduce herding or boost confidence despite its specific design and optimal presentation, and policy makers should ensure that the benefits of warning messages outweigh the costs they impose on business operators. In conclusion, this research provides behavioral and empirical evidence supporting the implementation of crypto-investing experience and knowledge tests as investor protection mechanisms. With better investor protection rules, cryptocurrency investors will be adequately protected and be able to make better investment decisions, lessen unintelligent speculative investments, and lower price volatility. Ultimately, cryptocurrency markets will provide more certainty and stability for cryptocurrency prices to stakeholders on blockchains, foster the growth of the emerging crypto economy, and optimize the efficiency of the blockchain.

Name thesis:degree_name

J.S.D.

Level thesis:degree_level

Dissertation

Discipline thesis:degree_discipline

Law

Grantor

University of Illinois at Urbana-Champaign

Year dc:date

2024

Author dc:creator

• Tantanawong, Napaskamol

Contributors dc:contributor

• McClane, Jeremy
• Aviram, Amitai
• Robbennolt, Jennifer Kirkpatrick
• Winship, Verity

• Cryptocurrency Investor Behavior
• Cryptocurrency Market In Thailand
• Information Problems
• Cryptocurrency Regulations

Statement dc:rights

• Copyright 2024 Napaskamol Tantanawong

Language dc:language

en, eng

Handle dc:identifier

https://hdl.handle.net/2142/125613

OAI record oai:identifier

https://www.ideals.illinois.edu/oai-pmh?verb=GetRecord&metadataPrefix=etdms&identifier=oai%3Awww.ideals.illinois.edu%3A2142%2F125613