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We study how childhood socioeconomic background is associated with adult participation in speculative asset markets. Using pooled waves of the National Financial Capability Study (NFCS), we find that a childhood socioeconomic status (SES) proxy is positively associated with cryptocurrency participation after controlling for current demographic and financial characteristics. This childhood-background gradient is substantially steeper for cryptocurrency than for penny stocks and commodity/futures. Risk tolerance, belief calibration, and objective financial literacy are all correlated with speculative participation, but they do not eliminate the stronger cryptocurrency pattern. The findings suggest that heterogeneity linked to early-life socioeconomic conditions is especially relevant for cryptocurrency participation.
Yongwook Kim (Wed,) studied this question.