Factors Affecting the Trading Performance of Cryptocurrency Investors in Bahrain

Cryptocurrencies have begun to gain popularity and are now a viable alternative asset class for investors. The purpose of this study is to investigate the effect of behavioral factors (e.g., herding and overconfidence), demographic factors (e.g., education), and investment experience on trade performance. This is quantitative research where a questionnaire was distributed to 270 cryptocurrency investors in Bahrain. The results show that behavioral factors such as herding, and overconfidence significantly affect the trading performance of cryptocurrency investors. However, demographic indicators such as educational level, investor age, and investment experience have no impact on cryptocurrency investors’ trading performance. Based on the knowledge of the researchers, this is the first study of this type in Bahrain. Hence, it will significantly contribute to the body of knowledge about cryptocurrency investment. Further, the study helps policymakers reevaluate the performance of cryptocurrency investment and strengthen the current policies and approach in this regard. The study advances knowledge of the characteristics and practices of individual Bitcoin investors that influence investment choices.