Investor Behaviour, Market Efficiency, and Regulatory Challenges in Digital Currency Investments

Abstract

The rapid proliferation of digital currencies has ignited significant interest in understanding investor behaviour and the regulatory challenges within this evolving financial landscape. The study seeks to elucidate the factors that influence investor behaviour in the cryptocurrency/digital currency market and explore the regulatory implications associated with digital currency investments. A systematic approach was adopted to identify, review, and analyze relevant scholarly articles from reputable databases. The selected articles span various dimensions of the cryptocurrency/digital currency ecosystem, including investor behaviour, market efficiency, technological innovation, and regulatory measures. It reveals that investor behaviour in the digital currency market is influenced by a complex interplay of emotions, market sentiment, and information asymmetry. Additionally, market efficiency theories are being reconsidered in light of the highly volatile nature of cryptocurrencies. Regulatory challenges encompass issues related to fraud, pump-and-dump schemes, and legal ambiguity.