Introduction The cryptocurrency market, known for its volatility and unpredictability, is subject to various external influences, including regulatory changes, technological advancements, and market sentiment. Among these, conspiracy theories have emerged as a unique and often underestimated force shaping the market dynamics. This comprehensive analysis delves into the intricate relationship between conspiracy theories and the cryptocurrency market, examining how they can impact prices, adoption, and overall market behavior. I. The Intersection of Conspiracy Theories and Cryptocurrency A. Defining Conspiracy Theories Conspiracy theories involve beliefs or explanations that suggest secretive and malevolent forces are at play behind events or phenomena. These theories often lack credible evidence and are typically characterized by skepticism towards official narratives. B. Cryptocurrency as a Disruptive Force Cryptocurrencies challenge traditional financial systems and are often viewed as a means of regaining control over one's financial assets, making them particularly appealing to individuals skeptical of established institutions. The decentralized nature of cryptocurrencies aligns with the ethos of decentralization and distrust of centralized authorities often associated with conspiracy theories. II. The Impact of Conspiracy Theories on Cryptocurrency Prices A. Price Manipulation Conspiracy theories can lead to market manipulation, where false information or rumors are spread to induce panic or euphoria among investors. This can result in significant price swings. Pump-and-dump schemes may be initiated based on conspiracy-related misinformation, causing rapid and artificial price spikes followed by dramatic crashes. B. Fear and Uncertainty Conspiracy theories can create an atmosphere of fear and uncertainty, causing investors to make hasty decisions, such as panic selling or buying, which can further exacerbate price volatility. False information can distort the perception of a cryptocurrency's value, leading to misinformed trading decisions. III. Influence on Market Adoption and Sentiment A. Trust and Credibility Conspiracy theories can erode trust in cryptocurrencies as a legitimate asset class, deterring potential investors who may be influenced by skepticism or fear. A lack of trust can hinder mass adoption, as mainstream users may be reluctant to engage with technologies associated with conspiracy-related narratives. B. Adoption by Niche Communities On the contrary, conspiracy theories can foster adoption within niche communities that share similar beliefs. These groups may view cryptocurrencies as a means of financial independence from perceived oppressive systems. The adoption within such communities can create unique market dynamics, where specific cryptocurrencies gain popularity due to their alignment with conspiracy-related narratives. IV. Regulatory Response and Impact A. Regulatory Scrutiny Conspiracy theories surrounding cryptocurrencies can draw attention from regulatory authorities seeking to address potential risks, including market manipulation, fraud, and investor protection. Increased regulatory scrutiny may lead to stricter compliance measures, impacting how cryptocurrencies are traded and utilized. B. Regulatory Clarity Regulatory responses to conspiracy theories can provide clarity and legitimacy to the cryptocurrency market, potentially stabilizing prices and encouraging broader adoption. Clear regulations can help mitigate the influence of misinformation and manipulation on market behavior. V. Combating Misinformation and Maintaining Market Integrity A. Education and Awareness Educating the public about cryptocurrencies and blockchain technology can help debunk unfounded conspiracy theories and provide a more accurate understanding of the market. Promoting transparency and providing credible sources of information can counteract the spread of misinformation. B. Industry Collaboration Collaboration between industry participants, including exchanges, developers, and influencers, can help establish best practices for addressing conspiracy-related narratives. Implementing mechanisms for identifying and mitigating false information can contribute to market integrity.
The influence of conspiracy theories on the cryptocurrency market is a complex and multifaceted phenomenon. While they can lead to increased volatility and distrust, they also highlight the importance of education, transparency, and collaboration within the cryptocurrency community. By addressing the challenges posed by conspiracy theories, the market can move towards greater stability, credibility, and widespread adoption. It is crucial for stakeholders to remain vigilant, adaptive, and proactive in mitigating the potential impact of misinformation on the cryptocurrency ecosystem.
Markets for cryptocurrencies such as Bitcoin have experienced tremendous growth. Yet little research has examined why people want to buy cryptocurrencies that are risky investments. The present research studies a subset of people interested in cryptocurrencies. Specifically, we examine the effect of Dark Tetrad traits (Machiavellianism, subclinical narcissism, subclinical psychopathy, and subclinical sadism) on a person's crypto attitude and buying intention. The following mediators were examined as reasons for people buying crypto: (1) conspiracy beliefs (e.g., distrust of government), (2) positivity and (3) fear of missing out (FoMO). Importantly, we are not suggesting all crypto buyers exhibit Dark Tetrad traits. Based on a pre-registered survey of the main research question rather than hypotheses (N = 566), it was found that narcissism was positively associated with crypto attitude which was mediated by positivity. Machiavellianism was associated with buying intention which was mediated by conspiracy beliefs. Machiavellians were more distrustful of government which was associated with a greater desire to buy crypto. Psychopathy affected crypto judgments through FoMO and a negative effect on positivity. Sadism is associated with FoMO and a lack of positivity which affects crypto judgments.
The global cryptocurrency market has a total market value of over USD$2 trillion, with cryptocurrencies such as Bitcoin increasing in price by over 8000% in five years (Coinmarketcap.com 2021). Cryptocurrencies (“crypto”) are digital currencies based on cryptography and blockchain technology. Crypto are traded on the internet through a peer-to-peer network that records transactions on a public blockchain, unlike fiat currencies which are government-issued. Currently, drivers of why people buy crypto are not well known. At first glance, crypto are a digital asset that offer potential capital gain from speculative risk. However, two features are worthy of note. First, crypto have extreme price volatility, their high-risk nature making crypto trading akin to gambling (Delfabbro, King, & Williams, 2021) with crypto trading appealing to gamblers (Mills & Nower, 2019). Second, crypto are decentralized and global. They are not backed by governments. We posit that this price volatility (i.e., potential gain) and autonomy from government oversight make crypto attractive to that subset of crypto buyers who are prone to gambling and are suspicious of government. Thus, the present research examines effects of the Dark Tetrad on crypto judgments. We are not suggesting all crypto buyers have Dark Tetrad traits. Further, we study three mediators underlying these effects - conspiracy beliefs, Fear of Missing Out (FoMO), and positivity. The Dark Tetrad involves the Dark Triad of antisocial personality traits (Machiavellianism, narcissism, psychopathy, Paulhus & Williams, 2002) and sadism (Buckels, Jones, & Paulhus, 2013). Machiavellianism is characterized by a manipulative approach towards others (Paulhus & Williams, 2002). Machiavellians take a calculated approach to achieve goals, avoid impulsive decisions and tend not to engage in problem gambling (Onyedire et al., 2021). Thus, it may seem that they would not be interested in a risky cryptocurrency. Sekścińska and Rudzinska-Wojciechowska (2020) found that although Machiavellianism was correlated with financial risk-taking (r = 0.25), subsequent studies showed no relationship with financial risk-taking (e.g., stocks) and gambling risks. However, we posit that the high returns of the crypto market may encourage Machiavellians to buy as they tend to be money-obsessed (Engelberg & Sjöberg, 2007) and make reward-oriented decisions in gambling (Birkás, Csathó, Gács, & Bereczkei, 2015; Błachnio & Przepiórka, 2018). Thus, Machiavellianism should be positively associated with cryptocurrency judgments. We predict the effect of Machiavellianism on crypto judgments will be mediated by conspiracy beliefs. March and Springer (2019) found Machiavellianism was positively associated with government conspiracy beliefs (r = 0.67). Similarly, Kay (2021) showed how Machiavellians' distrust of others was associated with conspiracist ideation. Hughes and Machan (2021) also found Machiavellianism was positively associated with COVID conspiracy beliefs. Regarding FoMO, this is defined as “a pervasive apprehension that others might be having rewarding experiences from which one is absent” (Przybylski, Murayama, DeHaan, & Gladwell, 2013). For our research, this is FoMO on crypto investing rewards that others are experiencing. Delfabbro et al. (2021) assert that FoMO is “one of the strongest psychological factors” for crypto trading because investors can see massive returns online in a 24-hour trading market. Machiavellianism is associated with affective responses from social comparison (Lange, Paulhus, & Crusius, 2018) and has been found to be positively correlated with FoMO (r = 0.32, Servidio, Griffiths, & Demetrovics, 2021). Thus, FoMO should mediate the effect of Machiavellianism on crypto judgments. Regarding positivity, Machiavellianism - with its cold, cynical perspective - has been found to be unrelated or to a lesser extent, negatively associated with positive affect (Jonason & Jackson, 2016; Limone, Sinatra, & Monacis, 2020; Pilch, 2020). Therefore, positivity should not mediate the effect of Machiavellianism on crypto judgments. Narcissism is characterized by self-aggrandizement and grandiosity (Paulhus & Williams, 2002). We believe narcissism would be positively associated with crypto investing. Narcissism has been found to be related to risky stock market investing (Foster, Reidy, Misra, & Goff, 2011; Sekścińska & Rudzinska-Wojciechowska, 2020). Thus, risky crypto should appeal to narcissists. For mediators, we expect narcissism to be associated with conspiracy beliefs. Kay (2021) found that narcissism is associated with conspiracist ideation. Recent research shows that narcissism accounts for 4% (Bowes, Costello, Ma, & Lilienfeld, 2021) and 4.9% (Ahadzadeh, Ong, & Wu, 2021) in the variance in conspiracy beliefs. Thus, it is plausible that conspiracy beliefs mediate the effect of narcissism on crypto judgments. Further, research indicates that FoMO mediates the effect of narcissism on smartphone addiction (Servidio et al., 2021). Błachnio and Przepiórka (2018) also found that narcissism and FoMO were positively associated with an excessive use of social media. However, these results may represent impression management (e.g., narcissists' self-presentation on social media) rather than FoMO about investment returns. Thus, we do not expect the effect of narcissism on crypto attitudes to be mediated by FoMO. For positivity, narcissists have agentic self-views, are overconfident and are more willing to take risks (Campbell, Goodie, & Foster, 2004; Joshanloo, 2021). Narcissists' overconfidence is associated with more gambling (Lakey, Rose, Campbell, & Goodie, 2008). Further, the positive effect on narcissism on risky stock market investing has been linked to an approach motivation (Foster et al., 2011). Thus, we predict that positivity mediates the effect of narcissism on crypto attitudes. Psychopathy is characterized by callous, impulsive antisocial behavior (Paulhus, 2014). The reckless nature of psychopaths paired with a tendency to experience low levels of stress and anxiety and a desire to seek stimulation (Jauk & Dieterich, 2019) makes them natural online gamblers. Research indicates that psychopathy is associated with problematic online gambling and gaming addiction (Jauk & Dieterich, 2019; Tang, Reer, & Quandt, 2020; Servidio, Griffiths, & Demetrovics, 2021). We predict that psychopaths would be willing to buy crypto. For mediation, psychopathy has been associated with COVID conspiracy beliefs (Hughes & Machan, 2021; Kay, 2021). The impulsivity of psychopaths (Paulhus, 2014) may lead them to experience crypto FoMO. Yet psychopathy is negatively associated with positive affect (Joshanloo, 2021). Thus, we predict that the effect of psychopathy on crypto judgments is mediated by conspiracy beliefs and FoMO, but not positivity. Everyday sadism relates to enjoying another's suffering (Buckels et al., 2013; Foulkes, 2019). Sadism has been found to be associated with behavior in a digital context. For instance, sadists troll others on the Internet for enjoyment (Buckels, Trapnell, Andjelovic, & Paulhus, 2019; Buckels, Trapnell, & Paulhus, 2014). However, as sadism involves pleasure from another's pain and buying crypto is unlikely to directly result in another's distress, we do not expect an association between sadism and crypto judgments.