International Journal of Scientific and Research Publications, Volume 8, Issue 12, December 2018 311

ISSN 2250-3153

A study on investor’s awareness and perception

regarding investment in Crypto currency with special
reference to Bitcoin
Dr. Neha Parashar *, Ms. Farida Rasiwala **
*
Associate Dean and Deputy Academic Coordinator, ICFAI Business School, Pune
**
Faculty Associate, ICFAI Business School, Pune

DOI: 10.29322/IJSRP.8.12.2018.p8442
http://dx.doi.org/10.29322/IJSRP.8.12.2018.p8442

Abstract- After the financial crises, it is evident that Bitcoin has It uses a peer-to-peer network which consists of nodes of
emerged to be the most successful crypto currency since its computer systems, which provide the computer necessary power
appearance back in 2009.The success can be attributed primarily to run the software for the network. The USP of these networks
to its security robustness, along with two main properties ie is that they have implemented the distributed ledger technology,
anonymity and decentralization. The robust network of which uses cryptographic techniques for the identification and
decentralized payment transactions has attracted a lot of attention validation of payments by network nodes;that are subsequently
among ecommerce users. This paper investigates whether bitcoin recorded decentralized in a public distributed ledger, called the
as an investment asset offers diversification benefits,more blockchain
specific whether bitcoin has hedge or safe haven properties.
Bitcoin is a decentralized digital cryptographic currency which
has gone through and still goes through spectacular
developments leading to a lot of media but also academic
attention
A cryptocurrency works best when the volume of
transactions is large relative to the individual transaction size
(e.g., as in a retail payment system). It uses peer to peer payment
network involving negligible cost with no involvement of third
party or financial institution in the payment transaction. Such
anonymity in the bitcoin network is the unique propagation
which was not inherently present in any e-commerce transaction.
Although blockchain technology brings innovation and a variety
of new applications to many industries, it is clear that the crypto
currencies based on this technology entail numerous risks. In this
paper, we have made an attempt to find out if Bitcoin or any
cryptocurrency is a feasible investment alternative for investors
seeking to compound the value of their wealth over time. Since
public awareness eventually defines Bitcoin’s price, the future
for Bitcoin lays with increasing positive public perception.

I. INTRODUCTION

T he most valuable and sought after commodities in the world

today is money, and it has affected people in almost every
facet of their lives. Nakamoto (2008) introduced the world’s first
decentralised crypto currency, called bitcoin. Since 2008, Bitcoin
is considered to be the most controversial innovations in this
field is cryptocurrencies. Bitcoin works on a new payment
technology, wherein it allows payers and payees to directly
transfer value to each other electronically and anonymously
without the need to use the services of trusted third parties, like
financial institutions (Nakamoto, 2008).

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most successful one. It has been getting a lot of media attention,

The big question which remains unanswered is why the and its total market value has reached 20 billion USD in March
demand for Bitcoin increasing continuously! 2017. More importantly, a number of central banks started
The demand is increasing mainly because of have several recently to explore the adoption of crypto currency and block
advantages associated crypto currencies such as decentralization chain technologies for retail and large-value payments. Bitcoin
and anonymity, low transaction costs and use of crypto currency can be explored as futuristic virtual currency in e-commerce
as a financial instrument to generate profit from its price transactions if the risk involved is managed efficiently. Present
volatility or to diversify a portfolio. Since the introduction of paper explores the perception and awareness regarding Bitcoin in
bitcoin, it has received considerable media attention worldwide, Pune with special reference to all the generations. Bitcoin is
as it was believed that cryptocurrencies have the potential to encrypted digital currency which can be bought, sold and
bring a drastic change in the existing retail payment ecosystem exchanged from market places. The value of Bitcoin
by eliminating traditional financial institutions like banks, which continuously changes and is traded like stocks on various
act as intermediaries between consumers and retailers, exchanges. Bitcoins are stored using Bitcoin wallets.
superfluous. Moreover, it was thought that, if the accessibility of Given the exponential growth in Bitcoins and other virtual
crypto currencies increases on a large scale, they could even currencies since they first came onto the scene in January 2009, it
affect the functioning of the monetary system (Halperin, 2013; is only a matter of time before your investment company client
Stevens, 2017). Considering this, Countries with strict capital asks you about the implications under the US Investment
control such as China and Iceland have prohibited crypto Company Act of 1940 (Investment Company Act) of making an
transactions, eliminating possibilities of bypassing capital control investment or accepting payment on a loan in Bitcoins. This
restrictions. article provides the necessary starting point for you to advise
So it is most unlikely for Bitcoin to recognized as an your client on these matters by getting you up to-speed on virtual
official currency for the economy as it has too many faults and currencies, flagging the main Investment Company Act questions
has too many risks, the most prominent being the scope of theft , posed by them and suggesting potential answers and solutions to
fraud or technical glitches where stolen Bitcoins are lost these questions.
forever. The following table highlights the as on date market
capitalization and price level at which the crypto currencies are
traded.
II. BITCOIN AND OTHER CRYPTO CURRENCIES
Since the creation of Bitcoin in 2009, numerous private
crypto currencies have been introduced. Bitcoin is by far the

Name of the Market Price ($) Circulat Percentage in Price

Cryptocurrency Capitalization(billion $) As on 30th ing fluctuation (24 hour -$)
march,2017 supply As on 30th march,2017
Bitcoin 120.56 7311.35 -7.56%
Ethereum 38.92 406.03 -6.91%
Ripple 20.02 0.52 -8.73%
litecoin 6.74 124.35 -3.29%
Dash 2.59 330.66 -4.61%

Source: www.bithumb.com

Bitcoin is most preferred Cryptocurrency with a market process lead-time and faster time to market, Increased customer
Cap of 120.56 billion $trading at a price of 7311.35 as on march service, Improved convenience and shopping experience,
30th march,2017. Apart from Bitcoin, Ethereum and ripple are Increased information transparency, Knowledge generation,
also preferred Cryptocurrency. From a user’s perspective Bitcoin Novel products and services.
is nothing more than a mobile application or computer program Mittal Alka (2017) focuses on merchants and traders who
that provides a personal Bitcoin wallet and allows a user to send accept this digital currency as a medium of exchange to
and receive Bitcoin with them. This is how Bitcoin works for overcome its problem of volatility. This will boost the market of
most users. Bitcoins not only in India but also in other developing
economies. This emphasizes that to survive in the system;
Bitcoin has to adapt itself to the required technical and
III. REVIEW OF LITERATURE operational innovations. In addition to this, government should
Singh Aarti and Nidhi Chawla (2016) discuss that future impose proper legal framework, to protect the consumers or users
of Ecommerce is difficult to predict but there are various of these digital currencies, as the progress seen in the
segments that would grow in the future like: emerging new transactions in this currency during the past few months is
technologies, education, awareness regarding new technology tremendous.
and frauds, Reduced search and transaction cost, Reduced

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IV. RESEARCH OBJECTIVES The level of awareness varied by Gender, Age group, Income
1. To study the level of awareness among investors and Education.
regarding bitcoin as a virtual currency
2. To study the perception of investors regarding Demographic Category Percentage
acceptance of bitcoin as mode of cash less transaction
3. To know investors opinion about future of bitcoin in Age 20-35 years 67.2%
India
4. To understand the investor opinion regarding 36-50 years 27.6%
government intervention and involvement to develop bitcoin as
legal mode for cash less transactions
Above 50 years 5.2%

Gender Male 81%

V. RESEARCH METHODOLOGY
The objective of the study is sought to be fulfilled through Female 19%
the analysis of the primary data. Field survey becomes essential Income level Less than 5 lakhs 15.5%
for the purpose of studying consumer awareness and perception
about crypto currencies and therefore gathering information 5 to 10 lakhs 39.7%
related to the same with the help of questionnaire. For the
10 to 25 lakhs 31%
purpose of the field work, the unit of study comprises working
profession/individual residing in different parts of Pune city. Above 25 lakhs 13.8%

Data collection Method Education Level Graduates 12.1%

A Descriptive Research has been conducted by reviewing Post Graduate 79.3%
the literature on the subject, followed by survey method to elicit
information from investors. A structured questionnaire has Professional 6.9%
prepared using different variables. The primary and secondary Others 1.7%
data has collected by using Simple Random Sampling technique.

Sampling Among 114 respondents Over 98.2% respondents said they

A sample of 114 respondents belonging to a segment of had heard of Bitcoin .Men we more likely to be aware about the
society would be taken on random basis for the present study. cryptocurrency Bitcoin than women. Almost 98% of men were
However, as far as we know, there are no primary studies aware about Bitcoin as compared to 91% of the women.
available to identify the level of awareness about the adoption of Generation Z (age 20-35 years)were more likely to have
crypto currency as a mode of payment among a large diverse heard about Cryptocurrencies than Generation Y(Age 36-50
group of working individual. This paper fills that gap. years) and Generation Z(above 50 years)
In our analyses we have paid due attention to the factors As the following charts say, over 97% of Generation Z was
which influence consumer demand for crypto payments, more likely than Generation Y (88%) and Generation X (75%) to
transactional benefits of receiving crypto payments relative to have heard about the crypto currency.
other means of payment, and non-financial barriers to individual’ More individuals residing in households with income over
adoption intention and actual acceptance of crypto payments. 10 lakh have heard of crypto currencies than those in lower-
The primary research also attempts to find out the level of income households.
the acceptance of payment methods, their perceptions regarding A higher percentage of post graduates (98 %) are more
crypto payments as well as mainstream online payment methods, aware of Bitcoin or another form of crypto Currency, with
their attitudes towards cryptos and their intention to adopt them remaining respondents having a graduate’s degree or less (80%)
as a means of payment. We use the resulting rich dataset to
answer our research question. Pune provides a good setting for
this research, as it has a well-developed online retail market.

Data interpretation and Analysis

A survey of 114 respondents was conducted to study the
consumer’s awareness and perception regarding investment in
crypto currencies, as well as the factors of consumer’s decision
on whether or not to use Bitcoin as mode of cashless payment.
Considering the change in payments landscape in India after the
demonetization, the survey helps to identify opportunities for a
coordinated state approach in addressing the cashless payments
issues as well as promote compliance security and protection for
consumers.

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Figure 3Awareness about Bitcoin (education wise

distribution)

Figure 1 Awareness about Bitcoin(Age wise distribution) Investment in Bitcoin or other Crypto currencies
Of the Respondents who had heard of Bitcoin, 27 % of
Note: This graph provides the percentage of individuals respondents had invested Bitcoin.Of those most likely to have
who answered “YES” to the question – “Have you heard of purchase were young respondents, aged 20-35 years old, as well
Bitcoin?” Results are broken down into age groups. The sample as post graduates.
consists of 114 respondents aged 20 or older. The investment pattern of Bitcoin varied dramatically by
population subgroup:
The younger respondents reported much greater willingness
to investment in Bitcoin and other currencies than older
respondents. Among 20-35 year olds, 29% have invested in
Bitcoin, compared to 14 % of those older than 50 years.
Moreover among those respondents who were 36- 50 years old
were very unlikely to invest in Bitcoin (76%)
A greater Proportion of Male(28%) than Female (18%)
have invested in Bitcoin.
Respondents with High household income (above 25 lakhs)
have not invested in Bitcoin whereas 39% of respondents with
medium income (5 -10 lakhs) have invested in Bitcoin.it is
assumed that high household income were least likely to invest in
Bitcoin in future v/s 39% of those with less than 10 lakhs.

Figure 2Awareness about bitcoin (gender wise distribution)

Figure 4 how many respondents have invested in Bitcoin ?

Age wise distribution

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Figure 5how many respondents have invested in Bitcoin

?(gender wise distribution)
This graph provides the distribution of responses to the
question –“Have you invested in Bitcoin as well as other Crypto
currencies”. Results are highlighted with respected to 114
respondents in multiple choice formats wherein respondents were
asked to tick all the crypto currencies that they have ever
invested including Bitcoin.
Of all the respondents who have invested in
Bitcoin(21.1%), 13% of respondents have also invested in
Ripple.
Respondents expressed opinion regarding future of
Bitcoin.Most respondents (43.9%) agreed that Bitcoin is a bubble
that will explode. Some of the respondent (12%), however, were
of the opinion that Bitcoin will survive and grow.
Figure 6 how many respondents have invested in Bitcoin?
(Income wise)

Figure 7 opinion about the future of bitcoin

The following graph provide the distribution of response to

the question-“Do the respondents consider the replacement of
Bitcoin transaction in the international currency transaction”
The majority of respondents,45.6% feel that the prevailing
This graph provides the distribution of responses to the system of currencies and mode of transaction will continue on for
question –“Are you aware about other Crypto currencies apart a much long time because of the resisitance to change and hence
from Bitcoin”. Results are highlighted with respected to 114 they find difficult to comment over the question.
respondents in multiple choice format wherein respondents were Few, 29.8% also feel that bitcoin could replace all monetary
asked to tick all the crypto currencies that they have ever heard transaction in domestic as well as international market.
apart from Bitcoin.
Of all the respondents who have heard of Bitcoin, 52.6% of The following graph provides the distribution of responses to the
respondents are also aware of Ripple followed by Ethereum question-“what is the opinion of respondents regarding
(47.4%). government intervenes to regulate the identity authentication of
Surprisingly there are 31% of respondents who have heard Bitcoin users”. Most respondents (80%) feel that government
of only Bitcoin, but have never heard of any other crypto intervention is very important for future and growth prospects of
currencies

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Bitcoin.Most respondents fear that the governments would

declare it as legallly invalid.

Figure 9 The opinion of respondents regarding Digital Asset

Blockchain Foundation of India .

The following graph shows the opinion of respondents

regarding a standardize KYC norms for the member companies
that would amplify the benefits of Cryptocurrency for most
marginalized people, merchants, tax departments and regulatory
authorities.
Figure 10 The opinion of respondents regarding the Of all the respondents 73.7% feels that a standardize KYC
replacement of Bitcoin transaction in the international currency norms for the member companies will amplify the benefits of
transaction Crypto currency. Bitcoin being a new concept in India needs to
standardize certain norms and regulations.

Figure 8 The opinion of respondents regarding government

intervention to regulate the Identity Authentication of
Bitcoin users
Figure 11 The respondents regarding a Standardize KYC
norms for the member companies that would amplify the
Digital Asset and Blockchain Foundation of India benefits of Bitcoin
(DABFI) is planning to lay down self-regulatory regimes for
trading of bitcoins and other blockchain based digital assets. The Of 114 respondents who answered the below question
opinion of respondents regarding such intervention is optimistic concerning about the advantages of using Bitcoin or crypto
with an majority of 61% of respondent agrees that such currency, most respondents feels that international acceptance of
intervention will adds to the advantages of bitcoin. Bitcoin as a mode of exchange currency is very important and
has a majority of 93 respondents .
87 respondents or 76 % said that low transaction charge is
considered to be advantageous factor for the use of Bitcoin.
45 respondents or 39% said that lack of centralized is the least
advantageous factor for the use of Bitcoin.

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Weighted Average
Mean of
Low Medium High advantages of
Advantages advantage advantage advantage cryptocurrency

Anonymous and invisibility related to Bitcoin

transaction 28 28 45 1.8

Speed of transaction 8 34 96 2.4

No Central Authority 37 10 45 1.6

Very low transactions/commission charges 13 30 87 2.28

International Acceptance especially as mode of

exchange currency 9 34 93 2.386

Easy to use and access 32 30 30 1.614

No inflation 22 32 57 1.9

No Chance to use personal data for fraud 16 30 78 2.18

Of 114 respondents who answered the below question concerning about the disadvantages of using Bitcoin or crypto currency,
most respondents feels that theft of hacking of Bitcoin and Technical glitches or errors are the disadvantages of bitcoin.
96 respondents or 84% said that volatility of exchange rate is considered to be disadvantageous factor for the use of Bitcoin in the
pursuit of cashless economy.

Low Medium High

Disadvantages disadvantageous disadvantageous disadvantageous WAM
Exchange Risk 11 32 90 2.3

Theft & Hacking 8 22 114 2.5

Technical Hitches 7 32 102 2.5

Volatility of
Exchange Rate 10 30 96 2.4

Required Expertise 9 40 84 2.3

No Central
Authority 12 14 114 2.46

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International Journal of Scientific and Research Publications, Volume 8, Issue 12, December 2018 318
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Of 114 respondents who answered the below question concerning about easy adaptation of Bitcoin as a method of cashless payment or
crypto currency, most respondents feels that Bitcoin should be regulated by government legislation or Government stamps for
approval should be considered.

Not at all Somewhat Particularly Most WAM

important important important important
If Bitcoin is regulated by 5 8 42 136 3.350877
government legislation
If there is more 9 24 63 60 2.736842
advertising/education about Bitcoin
If bitcoin prices are more stable 6 34 57 60 2.754386

If you could obtain bitcoin at your 10 24 39 72 2.54386

banks
If Major retail websites start 6 20 39 88 2.684211
accepting Bitcoin
If Major Bricks and Mortar stores 10 24 33 88 2.719298
start accepting Bitcoin
If Simplified and secure procedure 7 22 42 100 3
for Bitcoin purchase is adopted
If there is more secure storage 3 22 45 112 3.192982
methods for Bitcoin
If Governments stamps of approval 3 10 30 144 3.280702
If the Transaction savings on 5 24 54 88 3
Bitcoin is passed on to consumers
If Existing monetary transactions 5 24 54 88 3
are changed to accept Bitcoin

However, the primary research performed so far has proven that

VI. CONCLUSIONS most respondents feels that theft of hacking of Bitcoin and
Currently, the acceptance of crypto payments by individual Technical glitches or errors are the disadvantages of bitcoin.
who are educated and have a net worth of 5 to 10 lacs is modest. Although interesting research has been performed in this topic,
However, there is interest among respondents to adopt crypto the dynamism of the bitcoin ecosystem that constantly modifies
payments in the near future; indicating that acceptance may rise and enhances the bitcoin usage implies that some of the
once certain (perceived) barriers are lowered. In this paper we hypotheses assumed for those block chain analysis may not
examine which factors drive individual in adoption intention and completely hold and, for that reason, block chain analysis still
actual acceptance of crypto payments. As Bitcoin is a fully presents interesting open questions. Most respondents are of an
decentralized currency, the value is appreciating in the financial opinion that standardizes KYC norms for the member companies
economy because its supply is limited and there is huge demand that would amplify the benefits of Cryptocurrency for most
for it. The demand is mainly because of its low transaction costs, marginalized people, merchants, tax departments and regulatory
anonymity, investment possibilities and possibilities for use in authorities. Moreover Digital Asset and Block chain Foundation
illegal activities. of India (DABFI) is planning to lay down self-regulatory regimes
The future of bitcoin is questionable as Bitcoin has severe for trading of bitcoins and other blockchain based digital assets.
disadvantages such as high price volatility, susceptibility to The opinion of respondents regarding such intervention is
hacking, no protection from a central bank and no consumer optimistic with an majority of respondent agrees that such
protection.Bitcoin is a bubble because just like any other bubble intervention will adds to the advantages of bitcoin.
that we might have noticedi.e. dotcom bubble or housing bubble, Furthermore, some structural parts of the bitcoin system,
Bitcoin has no inherent value and the investors are willing to pay like the blochchain approach as an append-only ledger, may open
the price which is far more than its intrinsic value. Moreover the interesting challenges for future developments on secure
price is determined solely by the balance between buying and decentralized systems
selling.
It is therefore unlikely that it will catch on as an
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