Investment Intentions In Cryptocurrency: The Roles Of Financial Literacy, Investor Risk Tolerance, And Cyber-Security Risk

Abstract

Understanding cryptocurrency Investment Intention is vital to explaining how individuals interact with rapidly advancing financial technologies under uncertain conditions. Cryptocurrencies differ markedly from traditional assets because of their extreme volatility, decentralized structure, and limited regulatory control, which together intensify both financial risk and behavioral complexity (Aysan et al., 2021). Examining the motivations behind such investments helps researchers and policymakers gain deeper insight into how investors perceive risk, place trust in digital systems, and adapt to ongoing innovations within financial markets. This study investigates how Cybersecurity risk, financial literacy, and investor Risk Tolerance effects individuals’ intentions to invest in cryptocurrencies and examines whether Cyber security risk moderates the relationships among these factors. Using data collected from 394 individual investors in Pakistan and analyzed through Partial Least Squares Structural Equation Modeling (PLS-SEM), the results reveal that Cyber security risk is the most influential factor, exerting a strong negative effect on cryptocurrency. Financial literacy and investor risk tolerance also show moderate negative effects, while the moderating influence of CSR is statistically insignificant. These findings suggest that investors’ fear of cyber threats outweighs their financial understanding and willingness to take risks.The study provides useful implications for regulators, policymakers, and financial institutions seeking to build investor confidence in digital assets. By highlighting the importance of cybersecurity awareness and financial education, this research offers direction for developing strategies to mitigate perceived risks and promote responsible participation in crypto markets. It further contributes to the limited empirical literature from emerging economies by introducing cybersecurity risk as a central behavioral construct, revealing its dominant deterrent role in shaping cryptocurrency investment behavior.

Keywords: Cryptocurrency Investment Intention (I), Cyber-security risk (CSR), Financial Literacy (FL), Investor Risk Tolerance (RT).