Abstract:
This study explores the key behavioural and technological factors influencing the adoption of cryptocurrency among active traders in Sri Lanka, where cryptocurrency remains largely unregulated. The research primarily investigates the impact of Market Knowledge (MK), Regulatory Uncertainty (RU), Trading Experience (TE), Risk Management Practices (RM), and Technological Resource Utilization (TR) on the Adoption of Cryptocurrency (AC). A quantitative research methodology was employed, and data were collected from 203 active cryptocurrency traders through a structured questionnaire. The data were analysed using SPSS software, applying descriptive statistics, reliability analysis, normality tests, Pearson correlation, multicollinearity checks, and multiple regression analysis. The findings revealed strong positive and statistically significant relationships between all five independent variables and the dependent variable, confirming the proposed hypotheses. Market Knowledge, Trading Experience, Risk Management
Practices, and Technological Resource Utilization demonstrated particularly strong correlations with cryptocurrency adoption, while Regulatory Uncertainty had a moderate but significant relationship. Interestingly, demographic factors such as age, gender, income level, and education did not exhibit significant correlations with adoption, suggesting that psychological and technological readiness outweigh socio-economic status in influencing trader behaviour. The results underscore the importance of financial literacy, risk awareness, and technological engagement in facilitating the adoption of digital currencies, especially in developing economies facing regulatory ambiguity. The study contributes to the growing body of literature on cryptocurrency adoption and provides practical insights for policymakers, financial educators, and trading platforms in Sri Lanka. It also offers theoretical implications by confirming the relevance of behavioral finance and technology acceptance frameworks in explaining cryptocurrency adoption. Finally, recommendations are presented for improving financial education, policy
formulation, and technological infrastructure to promote responsible adoption within the evolving digital financial landscape.
