Abstract

As cryptocurrency adoption has grown, so too has investor participation, with millions of retail and institutional investors engaging in digital asset trading across exchanges worldwide. However, cryptocurrency market, despite its technological foundation, remains highly vulnerable to cybersecurity threats, hacking incidents, phishing attacks, exchange breaches, and wallet thefts which have led to the loss of billions of dollars globally. This study investigates the effect of cybersecurity-related factors on cryptocurrency investment frequency. Specifically, the study provides a behavioural-finance lens for understanding how cybersecurity perceptions shape investment decisions in the cryptocurrency market. The study adopted a quantitative, cross-sectional survey approach involving 384 active cryptocurrency investors, consisting of Students, Self-employed/Entrepreneur, Public Sector Employees, Private Sector Employee, and Unemployed. Data were analyzed using multiple regression model. The results show that Perceived Cybersecurity (β = 0.284, t = 3.94, p < 0.05), Platform Security Features (β = 0.217, t = 3.19, p < 0.05) and Trust in platform security (β = 0.298, t = 4.03, p < 0.05) have significant positive effects on cryptocurrency investment frequency. This indicates that investors are more willing to trade actively when they perceive strong protective measures and reliable security mechanisms within trading platforms. In contrast, previous exposure to cybersecurity incidents (β = -0.153, t = -2.51, p < 0.05) has significant negative effect on cryptocurrency investment frequency, suggesting that negative experiences with cyber breaches or fraud reduce investors’ willingness to invest frequently in cryptocurrencies. The study concludes that improving cybersecurity perceptions is pivotal to driving sustained investor engagement in cryptocurrency markets. Practically, the study suggests the need for cryptocurrency platforms to enhance their security infrastructures, promote transparency, and foster trust, while policymakers should develop regulatory frameworks to mitigate cyber risks.

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