The Impact of Risk Awareness, Perception, and Past Investment Experience on Cryptocurrency Investments in Sri Lanka

Abstract

This study examines the impact of risk awareness, risk perception, and past investment experience on cryptocurrency investments among Sri Lankan investors. Primary data were collected using a snowball sampling method from 124 Sri Lankan cryptocurrency investors, and the analysis was conducted using binary logistic regression. The findings reveal that risk awareness and risk perception significantly influence cryptocurrency nvestment decisions, while past investment experience does not play a significant role. Based on these results, the study suggests the implementation of policy measures aimed at enhancing investors' risk awareness and perception levels to foster a more informed and secure investment environment. Furthermore, policymakers should focus on developing regulatory frameworks that enhance investor security and create a stable and supportive ecosystem for cryptocurrency investments. Government intervention in the cryptocurrency sector can also play a crucial role in ensuring market stability and investor protection. Overall, this study contributes to a deeper understanding of the factors influencing cryptocurrency investment behavior in Sri Lanka and provides actionable insights for policymakers, financial regulators, and market participants to strengthen the country's cryptocurrency market.