When Uncertainties Matter: the Causal Effect of Cryptocurrency Investment on Retirement Hardship Withdrawals
By Zefeng Bai, Pengcheng Wang & hengwei zhang
Cryptocurrencies are invested in by approximately 15% of U.S. households. However, the high volatility of these assets poses substantial financial risks, particularly as 40% of U.S. households already face potential retirement shortages. Therefore, the present study aims at investigating the impact of cryptocurrency investment on retirement borrowing. Our causal analysis of 1,912 respondents revealed that cryptocurrency investors are 7.4% more likely to make a hardship withdrawal from their retirement accounts. This study provides insights for researchers and practitioners on managing retirement accounts by highlighting the potential financial risks associated with cryptocurrency investments.
Source SSRN
