A Research Paper

On
Perception of Cryptocurrency as an Investment Asset among Indian Retail
Investors

Submitted By
Himanshu Gupta
HRD2320159

Under the guidance of

Prof. Anjaly B.

Master of Business Administration (MBA)

Finance (2023-25)

Sri Balaji University Pune (SBUP)

Balaji Institute of Management and Human Resource Development (BIMHRD)

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 Research Paper Completion Certificate
This is to certify that Himanshu Gupta, Roll No. HRD2320159, has completed his/her
research paper titled Perception of Cryptocurrency as an Investment Asset among Indian
Retail Investors under my guidance.
This research was conducted for partial fulfilment of the requirement for the degree of Master
in Business Administration from Balaji Institute of Management & Human Resource
Development

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Date:
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1. Student Himanshu Gupta
2. Research Guide/Mentor Prof. Anjaly B.

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I /We, the undersigned, hereby, give the consent of the research paper entitled “Perception of
Cryptocurrency as an Investment Asset among Indian Retail Investors’’ to Sri Balaji
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Date:
Place:

Sr. No. Contributors Name of the Contributors Signature

1. Student Himanshu Gupta
2. Research Guide/Mentor Prof. Anjaly B.

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 Perception of Cryptocurrency as an Investment Asset among
Indian Retail Investors

ABSTRACT
This paper explores the perception of cryptocurrencies as investment assets by Indian retail
investors, toward understanding their motivations, risk perceptions, and adoption barriers. A
mixed-method approach with both surveys and interviews was utilized to source first-hand
data from retail investors across a wide demographic spread. According to the results, even
though the younger investors feel attracted by the prospects of high returns offered by
cryptocurrencies, concerns about volatility and uncertainty of regulatory environments have
still been a matter of concern. Dependence on social media and other digital platforms also
plays a very influential role in investment behaviour. The above-informed findings provide an
insight into the determinants shaping cryptocurrency adoption in India and its implications
for policymakers and financial advisors.
Keywords: Cryptocurrency, perception, retail investors, risk perception

1. INTRODUCTION
Notwithstanding the revolutionary class of investments that cryptocurrency represents with
potentially massive returns but at significant risks, it is no wonder most retail investors in
India harboured scepticism regarding their regulation ambiguity and the volatile market as
interest in digital assets like Bitcoin and Ethereum picked up among them. This paper
examines Indian retail investors' perception of cryptocurrency, and its motivation together
with perceived risks in the investment decision process amidst the role technology plays in
their investment behaviour. Understanding these views is likely to identify the pathways for
cryptocurrency adoption opportunity in India while pointing out possible barriers that may
impact its growth within a distinctive and diverse investor base.

Additional Information:
Under our market coverage, we are dealing strictly with cryptocurrency exchanges, online
trading platforms, and neobanks that either only offer B2C or both the B2B and B2C
services. The key players in this market are Coinbase, Binance & Robinhood.

 The Cryptocurrencies market in India is expected to grow upwards in terms of revenue

and projected to reach a massive figure of US$6.6bn by 2024.
 The growth is expected to proceed with an annual growth rate (CAGR 2024-2025) of -
2.44%, thereby taking the overall revenue to about US$6.4bn in the year 2025.
 Average revenue per user for Cryptocurrencies market in India is expected to be around
US$61.5 in the year 2024.

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 Moreover, considering the geographical location, United States stand at the first position
from where the highest revenue is going to be generated. The amount is expected to be
around US$9,788.0m in 2024.
 Users in the Indian Cryptocurrencies market are projected to reach 107.30m by the year
2025.
 User penetration rate, percentage of people using cryptocurrencies is projected at 7.41%
in 2024 and to increase to 7.35% in 2025.
 The interest in cryptocurrencies in India will be more due to financial inclusion and a low
level of confidence in the traditional banking systems.
Statista Market Insights (2024) https://www.statista.com/outlook/fmo/digital-
assets/cryptocurrencies/india#revenue

Cryptocurrency Users in India

 Between June 2023 and Jan. 2024, a massive surge was witnessed with the number of
women in India investing in Bitcoin or other cryptocurrencies rising by 300%.
 This means nearly one in every five of its customers is a female, mainly in the 18 to 34
years old category. Still, because of the changes in the regulatory environment, it is hard
to ascertain how many of its Indian users will be affected.
 A Mudrex survey conducted between June 2023 and Jan. 2024 among 8,976 Indian
participants found that 69% respondents were men investors, whereas 29% respondents
were women, and the remaining 2% respondents did not disclose their gender. Male to
female ratio of survey participants was at 3:1 wherein 80% of the participants were
between 20 and 35 years of age.
 Of which 49.5% earn less than INR 5 lakh. Approximately 58.5% have investments in
equities (stocks and mutual funds) and crypto.
 Delhi-NCR topped the chart for leading crypto adoption in tier-1 cities, followed closely
by Bengaluru, Mumbai, Hyderabad, Chennai, Pune, Lucknow, and Ahmedabad.
Dipen Pradhan, Forbes Staff (2024), Reviewed by: Aashika Jain, Editor
https://www.forbes.com/advisor/in/investing/cryptocurrency/cryptocurrency-
statistics/#:~:text=Popular%20Crypto%20Assets%20in%20India%201%20In%202023%2C,
2022%2C%20with%209%2C314%20considered%20active.%20...%20More%20items

Cryptocurrency Regulation and Taxation in India

 In 2018, the Reserve Bank of India banned the operations of allied activities of banks
with cryptocurrency exchanges.
 Even though the ban was removed in the year 2020, the Indian government may still
impose regulations on holding, trading, or even mining cryptocurrencies as personal
assets.

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 Indian cryptocurrency industry lobbying to reduce the TDS rate of 1% to 0.01%. Indian
cryptocurrency exchanges are holding together on the existing 1% TDS and doing
everything possible to prolong the period of sustaining it.
 Indian tax policies have sent offshore around five million cryptocurrency traders due to
the tax policies of the country.
 These losses reflect what will now amount to the loss of a potential revenue stream of
$420 million to the state, considering that taxation on digital assets started in July 2022.
Dipen Pradhan, Forbes Staff (2024), Reviewed by: Aashika Jain, Editor
https://www.forbes.com/advisor/in/investing/cryptocurrency/cryptocurrency-
statistics/#:~:text=Popular%20Crypto%20Assets%20in%20India%201%20In%202023%2C,
2022%2C%20with%209%2C314%20considered%20active.%20...%20More%20items

Popular Crypto Assets in India

 In 2023, there was just one and only crypto being widely used, Dogecoin, which made up
11% of the total invested value in crypto, ahead of Bitcoin at 8.5%, and Ethereum at
6.4%.
 Deposits increased by 80% from Jan to Feb 2024 compared to 2023. Total transactions
across platforms increased 100% during the last three months, and sign-ups increased a
whopping 200%.
 Cryptocurrencies have evolved from 50 in 2013 to reach 21,844 by 2022, with 9,314
actives.
 Ethereum, Solana, and Cardano have the largest staking market capitalization, offering an
annual yield of 4-5%. Interestingly, 10% of Ethereum is staked.
 Crypto statistics: By 2023, nearly 9,000 existed in circulation. However, only the top 20
cryptocurrencies share 90% of the pie.
Dipen Pradhan, Forbes Staff (2024), Reviewed by: Aashika Jain, Editor
https://www.forbes.com/advisor/in/investing/cryptocurrency/cryptocurrency-
statistics/#:~:text=Popular%20Crypto%20Assets%20in%20India%201%20In%202023%2C,
2022%2C%20with%209%2C314%20considered%20active.%20...%20More%20items

2. LITERATURE REVIEW
Saputri, A. Y., & Kurnia, M. (2023) assisted in better understanding Indonesian millennial
investors' behaviour toward cryptocurrencies, this study addresses the perception, risk, return,
and decision-making literature in times of market turbulence, especially given the ongoing
conflict between Russia and Ukraine. Using the primary data from 94 respondents, this study
concludes that while return and decision-making are not influential in investment decisions,
risk and perception have a beneficial impact on bitcoin investing. The implications are that
there is a need for safe and informed investment strategies by pointing out that investors

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should make high-risk and worse-timed decisions after proper scrutiny of risk levels and the
timing involved. High profits are often accompanied by increased risks.
Parashar, N., & Rasiwala, F. (2018) scrutinized the investment perspectives of Bitcoin,
particularly in relation to how it can be used as an asset in investment, which can be used as a
hedge or haven in uncertain markets. Low transaction costs, anonymity, and elimination of
third-party financial intermediary costs-no wonder then that Bitcoin, a decentralized digital
currency, has been popular since its inception in 2009. The research manuscript will be based
on the appeal of Bitcoins to e-commerce users because of its decentralized nature of a peer-
to-peer network but will also run down the risks associated with cryptocurrencies. Findings:
From the above statement, it is found that increased public awareness and the overall positive
perception will emerge as an important determinant of Bitcoin in terms of future investment
opportunities and again ultimately determines its price.
Rosmiwilujeng et al. (2023) did a comparative analysis on herding behaviour and regret
together with millennial investment in crypto assets in Indonesia, focusing on differences
between students and urban employees like Surabaya and Sidoarjo. Using a survey method,
the study applies multiple linear regression analysis by using the data of the students and
employees. The result comes out to show that both herding behaviour and experienced regret
have positive influences on millennials' decisions toward investment in crypto assets. The
results also show that urban millennials tend to be more willing to invest in risks, particularly
in high-risk assets like cryptocurrencies and stocks.
Gazali, H. M., Ismail, C. M. H. B. C., & Amboala, T. (2018) extended the Theory of
Reasoned Action (TRA) with perceived risk and perceived benefits to investigate what
factors will influence users' intentions to invest in cryptocurrency, specifically Bitcoin. In this
research study, the investing behaviour in the cryptocurrency is more extensively described
with the inclusion of perceived risk and perceived benefits from a perspective of investment
decision making. Even though the research work provides a hypothetical framework for
analysing investment intentions, empirical evidence that refers to how associations happen
among these variables is missing. The current study therefore adds to literature in this regard
as it offers insight into psychological factors that determine investment in cryptocurrencies;
however, further empirical support is still required to solidify its conclusions.
R, B., & Aithal, P. S. (2022) concentrated on the behaviour intention of investing in
cryptocurrency based on the investment motivation. Some of the determinants are easy use,
social influence, convenience, trust, price volatility, self-belief, privacy, risk, and the process
involved in decision-making, which have been studied to understand the behaviour of
investors. Through these determinants, the study can provide insights that help a user or
merchant by adapting business strategy in an effective and appropriate way. A comprehensive
literature review is conducted to categorize and analyse the available literature in relation to
cryptocurrency behaviour. Hopefully, the findings will allow advancing one's knowledge
regarding why people use cryptocurrencies and invest in them.
Mohd Adnan, Rashika Kumari and Jaidev Singh Negi (2022) examined the growth pace and
adoption of cryptocurrencies in India, among the millennials, utilizing the Technology

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Acceptance Model (TAM) was carried out. It specifically deals with how these millennials
perceive useful, easy-to-use, and secure dimensions in influencing their intention to invest in
cryptocurrency. The researcher adopted a quantitative survey-based approach, where self-
administered questionnaires were distributed to 125 respondents. Those factors of perceived
usefulness, ease of investing, and perceived risk significantly impact millennials' behavioural
intention to invest in cryptocurrencies. The findings of this study are of meaningful
contribution to understanding how users perceive this novel class of financial product and to
guide the designing of cryptocurrency services by organizations to gain investment attraction
and increase transactional usage.
Parab, Leenata & Nitnaware, Prashant. (2022) discusses the acceptance of cryptocurrency as
an investment tool in India in comparison with traditional investments made in gold, fixed
deposits, SIPs, and stocks. The factors that induce the transition are inferred based on a
literature review from newspaper articles, online sources, and social media sources. It also
discusses blockchain technology as a foundational element of the cryptocurrency's success,
detailing several types of cryptocurrencies, along with the advantages and disadvantages of
digital currency from an Indian perspective. The research gives an insight into the change in
investment behaviours seen in India, with the interest for digital assets slowly but surely
increasing within the financial sector.
Bhilawadikar, V. S., & Garg, E. (2020) investigated millennial awareness and aspirations
toward various investment assets, with a focus on cryptocurrencies as a high-risk, high-return
category. Digital currencies like Bitcoin, Ethereum, and Ripple have gained global traction,
yet regulatory acceptance varies—Japan and the US permit some cryptocurrency
transactions, while India remains cautious. Despite regulatory hesitations, the study finds that
millennials' interest in and desire to invest in cryptocurrencies is rising. The objective is to
understand millennial attitudes toward cryptocurrency investment, given their affinity for
digital innovations and technology, highlighting a generational shift in investment
preferences toward digital assets.
Shetty, S. K., Spulbar, C., Birau, R., & Simion, M. (2023) examined the attitudes of Indian
youth toward cryptocurrency, noting an increasing awareness but limited investment
engagement and understanding of associated risks. A mixed-methods approach was used,
with data collected through questionnaires from over 200 active and passive investors,
complemented by secondary sources like journals and online resources. Findings reveal that
while many young individuals are aware of cryptocurrencies, few have invested, lacking a
comprehensive risk understanding. Hypotheses were tested to provide practical
recommendations for youth, aiming to enhance their knowledge and inform their approach to
cryptocurrency investment amidst shifting generational attitudes.
Dr, A. S. K., Dr, B. R., & Dr, M. N. (2023) analyzed the investment decisions of 103 young
investors in the cryptocurrency market, examining how experience, earnings, risk tolerance,
and liquidity preferences shape their perceptions. Using regression and factor analysis, the
study finds that while young investors possess a basic understanding of cryptocurrency risks,
there remains a significant need for improved risk management strategies. The research

9
validates the reliability of the measures used, effectively capturing critical factors relevant to
cryptocurrency investments, thus providing insights into young investors’ attitudes and the
importance of supporting informed investment practices in this high-risk market.

3. PROPOSED RESEARCH GAP STATEMENT

Despite the growing interest of investors in the cryptocurrencies, up to now only a few
research focuses on investment in cryptocurrency from the specific perspective of the Indian
retail investor. All research conducted so far on this topic are mostly based on global trends or
institutional investors rather than the Indian retail investor, hence, in terms of the cultural,
economic, and regulatory context unique for India, this understanding is missing. This
research fills this gap by exploring the motivations, perceived risk, and adoption barriers
unique to Indian retail investors and offers valuable insights into the adoption of
cryptocurrency within the Indian investment landscape.

4. CONCEPTUAL FRAMEWORK

Conceptual Framework Overview:

This conceptual framework aims to explore how independent variables (knowledge,
motivations, risk tolerance, and trust) influence dependent variables (perception) concerning
cryptocurrency investment among Indian retail investors. The arrows in the framework
illustrate how these independent factors shape the attitudes and behaviours of investors.
Key Variables in the Framework:
Independent Variables:
a) Knowledge of Cryptocurrency: Relates to whether the investor knows about
cryptocurrency, how the market works, and potential risks or rewards associated with
it. Knowledge might then affect a more positive perception and higher confidence in
investment decisions.
b) Motivations for Investing: These include the possibility of high returns, the
decentralization aspect associated with cryptocurrencies, and innovation introduced in
the investment sector. Such motives may directly affect the investment intention.

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 c) Risk Tolerance: This is the willingness of an investor to engage in the underlying
volatility and risk of cryptocurrency. Risk tolerance is found to be positively
correlated with investor perceptions of positive long-term and short-term attitudes
and, correspondingly, high and low investment intentions, respectively.
d) Trust in Cryptocurrency: The extent to which the investor feels confident about his
safety and security of cryptocurrency as an asset class, dependent on his experience
level, sources of information, and attitudes toward risk.
Dependent Variables:
a) Perception of Cryptocurrency: Perception of the cryptocurrency by the
investors as an investment asset with its pros and cons comparing to the traditional
assets.
This framework sets the stage for a comprehensive investigation into the factors affecting
cryptocurrency adoption among Indian retail investors.

5. RESEARCH QUESTION
What are the primary reasons investors choose or avoid cryptocurrencies?
How do investors perceive the risk and potential returns of cryptocurrency compared to
traditional assets?
To what extent do motivation for investing and trust in regulation and security influence
Indian retail investors' perception of cryptocurrency as a legitimate asset?

6. RESEARCH OBJECTIVES
To assess the impact of knowledge of cryptocurrency on Indian retail investors' perception of
it as an investment asset.
To investigate how risk tolerance affects Indian retail investors' perception of cryptocurrency.
To examine the influence of motivation for investing on the perception of cryptocurrency
among Indian retail investors.
To analyse the role of trust in regulation and security in shaping Indian retail investors'
perception of cryptocurrency as an investment asset.

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7. HYPOTHESES
Knowledge of Cryptocurrency
 Null Hypothesis (H0₁): There is no significant relationship between the level of
knowledge about cryptocurrency and the perception of cryptocurrency as an
investment asset among Indian retail investors.
 Alternate Hypothesis (H1₁): There is a significant positive relationship between the
level of knowledge about cryptocurrency and the perception of cryptocurrency as an
investment asset among Indian retail investors.

Risk Tolerance
 Null Hypothesis (H0₂): There is no significant relationship between risk tolerance
and the perception of cryptocurrency as an investment asset among Indian retail
investors.
 Alternate Hypothesis (H1₂): There is a significant positive relationship between risk
tolerance and the perception of cryptocurrency as an investment asset among Indian
retail investors.

Motivation for Investing

 Null Hypothesis (H0₃): There is no significant relationship between motivation for
investing and the perception of cryptocurrency as an investment asset among Indian
retail investors.
 Alternate Hypothesis (H1₃): There is a significant positive relationship between
motivation for investing and the perception of cryptocurrency as an investment asset
among Indian retail investors.

Trust in Regulation and Security

 Null Hypothesis (H0₄): There is no significant relationship between trust in
regulation and security measures and the perception of cryptocurrency as an
investment asset among Indian retail investors.
 Alternate Hypothesis (H1₄): There is a significant positive relationship between trust
in regulation and security measures and the perception of cryptocurrency as an
investment asset among Indian retail investors.

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8. DATA & METHODOLOGY
Research Type:
The research employed convenience sampling and snowball sampling method to gather data
from respondents. This approach was chosen for its practicality, allowing the selection of
participants who were easily accessible and willing to contribute, ensuring timely and
efficient data collection.
Sample of the Project:
The study focuses on perception of Indian retail investors who invests in all asset classes
including cryptocurrency, such as full-time investor, traders, long-term investors, youngsters,
adults and retired person and how they look upon cryptocurrency investment. The sample
size for this data collection is 250 samples.
Data Collection:
The data for this study was collected through Microsoft Forms, which proved to be a
convenient platform for distributing the questionnaire. This allowed the respondents to
submit their inputs easily, ensuring structured and organised data collection.

SEM Application in the Framework

SEM is used as a comprehensive statistical technique in assessing and analyzing relationships
among the observed and latent variables. The diagram depicts an SEM analysis, representing
how theoretical constructs-latent variables-circled; squares represent measurable items or the
observed variables-with related errors.
Key Features:
a) Latent Variables: BF, EA, IIP, SF, FSP is examples of latent variables. These are
constructs that can't be observed directly, whilst the associated indicators can be observed
(for example, BF1, EA1, FSP1).
b) Factor Loadings: The single-headed arrows from latent variables to observed variables
depict factor loadings. This represents the strength of the relationship. High loadings like
EA→EA3=0.98 would suggest that those correlations are strong and contribute much to
constructing validity.
c) Error Terms: Measurement errors are shown as small circles (e.g., e1, e13), which
express unobserved but residual variation for observed variables.
d) Association between the Latent Constructs: Double-headed arrows depict covariances
or correlations between constructs and single-headed arrows direct effects (e.g., BF →
FSP, BF → SF).

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Table 1
Reliability and Validity Test

Table 2

In the above table reliability analysis shows a strong internal consistency, indicated by a
Cronbach's Alpha of 0.820 for 15 items. All 250 responses were valid, with no missing data,
ensuring a comprehensive dataset for the analysis. These findings confirm that the survey
instrument is dependable for assessing factors like knowledge, motivation, risk tolerance, and
trust affecting perceptions.

The table summarizes item statistics for a 15-item scale. Means of items are very consistent
with an average of 3.459 and a narrow range of 0.288 with a variance of 0.007. Item
variances were also stable with an average of 1.733, showing minimal spread, with range =
0.334, and variance = 0.008. Inter-item covariances were moderate with an average of 0.404,
and the range was wide that is, 0.740. The figure shows how the inter-item covariance values
vary within a wide range, representing variations in shared variance among items. Inter-item
correlations also reflected somewhat similar results, ranging from the mean to 0.233, a range
of 0.416. In general, data shows that the scale has consistency among item responses and
moderate associations that may imply construct coherence.

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The ANOVA table summarizes variance decomposition of a data set. Individual differences of
249 participants represent the Between People variance (Sum of Squares = 1838.960, Mean
Square = 7.385). Within people variance includes between Items with Sum of Squares =
24.205, F = 1.301, and p = 0.198, showing no significant difference among 15 items. The
residual variance accounted for residual variability among participants. The mean square =
4633.928, Sum of Squares = 1.329, Total Variance = 6497.093 at all levels. The non-
significant result of p > 0.05 indicates that consistency exists in item responses.
The items are not significant in ANOVA analysis because F = 1.301, p = 0.198, meaning that
all items produce similar responses from the participants. Most of the variations arise due to
the differences between the people, which can be inferred from Between People Sum of
Squares at 1838.960. Variance at the residual level signifies the remaining variability that
cannot be explained; however, on a whole, the items show good consistency.

SEM ANALYSIS
This phase of the study consists of two steps.
These steps include:

 Determining the measurement model, which includes the procedure of confirmatory factor
analysis,
 Describing the estimated model coefficients through the structural Equation model.

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Confirmatory Factor Analysis (CFA)

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Table 3: Confirmatory Factor Analysis (CFA) Model Fit Indices

Fit Indices Recommended Observed Result

χ2 =136.095
Insignificant Significant
Chi-Square test Df = 80
Chi-square test (χ2) Chi square test
p-value = .000

CMIN Less than 5 1.701 Good fit

CFI (Comparative fit More than 0.9 (Good fit)

0.910
index) 0.8-0.9 (Borderline fit) Good fit

More than 0.9 (Good fit)

TLI
0.8-0.9 (Borderline fit) 0.881 Acceptable fit

RMESEA (Root mean Less than 0.08 (Adequate

square error of fit)
0.053 Adequate fit
approximation) 0.08-0.1 (Acceptable fit)

The table presents the model fit indices for a Confirmatory Factor Analysis. The chi-square
test was significant: χ² = 136.095; p < 0.001, which may indicate poor model fit. However,
since this test is extremely sensitive to the sample size, it is meaningless to report; instead, the
following values will be used as the metrics of model fit: CMIN value χ²/DF = 1.701 < 5, that
means good fit. The CFI = 0.910 exceeds the threshold of 0.9, which means the fit is
satisfactory. The TLI = 0.881 is just below 0.9; however, it is within the acceptable ranges.
Finally, the RMSEA = 0.053 is below 0.08, which hence gives adequate fit. In sum, though
the strong chi-square test indicates a poor fit for the model, other indices-CMIN, CFI, and
RMSEA-suggest that the model presents an acceptable to good fit. TLI's slight shortfall does
not speak against the suitability of the model for the data.

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Structural Equation Modelling (SEM Analysis)

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Within the SEM, four independent variables—Knowledge (KN), Risk Tolerance (RT),
Motivation (MO), and Trust in Security (TS)—are used to determine the dependent variable,
which is Perception of Cryptocurrency (PC). Path coefficients point to how much influence
each independent variable exerts on the dependent variable. Of all the path coefficients,
Knowledge possesses the highest effect at 1.07, followed by Risk Tolerance, with a
coefficient of 0.97, then Motivation at 0.96, and the lowest at Trust in Security at 0.82.
It hence infers that the greater the knowledge and greater the risk tolerance of the investors
will have a positive perception about cryptocurrency. Furthermore, factor loadings ranging
from moderate to strong indicate that the latent constructs are strongly associated with their
observable variables. For instance, KN3 = 0.56. The smaller the error terms, it indicates that
the latent constructs explain much of the variance in observed variables.
The results highlight investor education, risk preferences of a psychological nature, and
confidence in regulation and security as three determinants of perception of cryptocurrencies,
and it identifies areas for improvement for boosting acceptance among Indian retail investors.

9. HYPOTHESIS TESTING
Based on the path coefficients of your SEM analysis, the following are the assessments of
your hypotheses: A larger path coefficient means more significant influence; in this case, it is
on the side of the alternate hypothesis, H1, while weaker or insignificant coefficients will fall
on the side of the null hypothesis, H0.
a) Knowledge of Cryptocurrency (KN)
Path Coefficient: 1.07
Interpretation: The strong positive path coefficient suggests that knowledge
significantly impacts the perception of cryptocurrency as an investment asset.
Decision: Reject the null hypothesis (H0₁) and accept the alternate hypothesis (H1₁).

b) Risk Tolerance (RT)

Path Coefficient: 0.97
Interpretation: The high positive coefficient indicates that risk tolerance
significantly influences the perception of cryptocurrency.
Decision: Reject the null hypothesis (H0₂) and accept the alternate hypothesis (H1₂).

c) Motivation for Investing (MO)

Path Coefficient: 0.96

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 Interpretation: The strong positive coefficient shows that motivation plays a
significant role in shaping the perception of cryptocurrency.
Decision: Reject the null hypothesis (H0₃) and accept the alternate hypothesis (H1₃).

d) Trust in Regulation and Security (TS)

Path Coefficient: 0.82
Interpretation: While slightly weaker compared to other variables, the positive
coefficient still indicates that trust in regulation and security significantly affects
perception.
Decision: Reject the null hypothesis (H0₄) and accept the alternate hypothesis (H1₄).

Summary of Hypothesis Testing

The four alternate hypotheses (H1₁, H1₂, H1₃, H1₄) are valid since significant positive path
coefficients for independent variables to the perception of cryptocurrency exist. In other
words, knowledge, risk tolerance, motivation, and trust in security are critical variables
influencing perceptions about cryptocurrency amongst Indian retail investors.

10. FINDINGS & INTERPRETATION

Analysis reveals that knowledge, risk tolerance, motivation to invest, and trust in regulation
and security are major influences on the perception of cryptocurrency as an investment asset
among Indian retail investors. Knowledge influences the most. This means that it is likely the
investors better informed about it will perceive it positively. Risk tolerance follows, meaning
that more tolerant investors to risk themselves tend to regard cryptocurrencies as good assets.
Other such crucial factors include investment motivation, signifying the motivations of
financial or personal goals in determining perceptions. The trust in regulation and security
also has a significant impact on perception, although it is slightly weak as indicated by the
role of confidence in institutional safeguards. Structural Equation Modelling verifies these
positive relationships of such independent variables towards the dependent variable of
perception in regard to cryptocurrency with path coefficients indicating high effects.
Reliability and validity tests validate the internal consistency of the survey tool, and
confirmatory factor analysis confirms that the model fits with minor deviations. Essentially,
the research findings indicate that knowledge improvement among investors, considerations
of risk, and strengthening of the regulatory framework are parameters prioritized to ensure
acceptance of cryptocurrencies by Indian retail investors. All four alternate hypotheses are
supported because, whereas the study emphasizes the relationships between psychological,
motivational, and institutional factors that influence perceptions regarding cryptocurrencies,
it is apparent that each one plays a more specific role in forming an opinion.

20
11. CONCLUSION
This paper explores knowledge, risk tolerance, motivation, and trust in regulation and
security as predictors of Indian retail investors' views toward cryptocurrency as an
investment. The findings indicate that knowledge was found to be the most significant
predictor, and educational campaigns work well in changing favourable perceptions among
the targeted segment of the population. Tolerance of risk follows as a crucial factor showing
that investors willing to take their confidence in the relatively inherent volatility of
cryptocurrency are much more likely to find it as a viable investment. Motivation through
potential returns and innovation is an important factor driving perceptions, but to a lesser
extent than knowledge and risk tolerance. Trust in regulation and security plays less but still a
very important role, indicating trust in governance frameworks has an influence on investor
attitudes.
From the SEM outcomes and hypothesis testing, it is evident that all four independent
variables are positively affecting the dependent variable. From this observation, not only
psychological but regulatory barriers also need to be considered when promoting the adoption
of cryptocurrencies. Overall, the paper provides a holistic understanding of the determinants
that shape attitudes among Indian retail investors toward cryptocurrencies.

12. FUTURE SCOPE

Other factors to be included in future studies may be why people will or will not embrace
cryptocurrencies. For instance, a study can focus on social media influence and peer
influence as ways explaining how external sources of information affect perceptions. Further
analyses can also be directed at demographic differences- perhaps looking at age, gender, or
income to try and understand a specific subsection of the retail investment population which
has peculiar needs and behaviours. Longitudinal studies tracking the shift in attitudes of
investors over time, because of regulatory changes, market dynamics, or education initiatives
would be other aspects which could strengthen the study even further.
Some practical implications for policy makers and financial institutions would be the design
of investor education programs in a way that enhances their knowledge base as well as risk
management skills. Technology developers and exchanges should develop secure platforms to
ease some of the concerns related to trust. Finally, cross-national comparisons can elucidate
how cultural and economic differences shape perceptions and therefore offer global
perspectives.

13. LIMITATIONS
This research study itself possesses some limitations. Convenience and snowball sampling
may not ensure proper representation of the general Indian retail investor community. The

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conclusions drawn are based on the perception of participants who were easily approached or
more willing to respond. It excludes many other critical sectors that may be left out. There is
thus a threat of response bias since this study is based on self-reported data by participants as
they are likely to give socially desirable responses.
More basically, the research is cross-sectional, which samples perceptions at a point in time.
Market conditions for cryptocurrencies are highly volatile, and investor attitudes may change
with new developments in market conditions or regulatory frameworks. Longitudinal studies
might be needed to gain further insights from such changes. Further, focusing on four
elements-knowledge, risk tolerance, motivation, and trust-whose impact is certainly
significant, yet misses out on many others that can similarly be crucial factors in investment
decisions-for example, technological literacy, media influence, or economic stability.
Lastly, this study does not consider the influence of certain types of cryptocurrencies or
investment types, which naturally vary significantly. Subsequent studies might measure
whether perceptions are different for highly volatile coins such as Bitcoin in comparison to
stablecoins or even tokens with certain functionalities. Overcoming these shortcomings will
enhance the robustness and generalizability of future studies.

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