An examination of individual investors' financial risk perception in the cryptocurrency market: The case of the England

Financial risk perception is one of the fundamental factors influencing investment decisions. It refers to the way investors interpret the same market conditions differently. This perception is shaped by multidimensional factors such as personality traits, cognitive and emotional biases, and demographic characteristics. The cryptocurrency markets, which are characterized by high volatility, regulatory uncertainties, and sudden price fluctuations, provide an appropriate environment to examine how individual differences in financial risk perception are reflected in investment behavior. In this context, the study investigated the effects of individual investors' personality traits as well as cognitive and emotional biases on their financial risk perceptions. Data were collected through a survey from 1,050 participants in the United Kingdom and analyzed using the SPSS 22 software. The findings revealed that investors with higher levels of emotional stability, extraversion, and conscientiousness tended to have lower financial risk perceptions; whereas investors who were more prone to representativeness, availability, optimism, overconfidence, endowment, anchoring and adjustment, and framing biases exhibited higher financial risk perceptions. It was also determined that financial risk perception significantly varied according to personality traits, cognitive-emotional biases, and certain demographic factors. However, the limited representativeness of the sample and the fact that data were collected solely through self-report methods were identified as factors restricting the generalizability of the findings.