WHY PEOPLE AVOID INVESTING IN CRYPTOCURRENCY

Abstract

The cryptocurrency world has witnessed an shift from 2024 to 2026. The cryptocurrency world has grown from being an exclusive technology experiment into a multi-trillion dollar financial structure that is intertwined with the mainstream banking sector, institutions, and policymaking. It should be noted that the total market capitalization of cryptocurrencies has passed the USD 4 trillion milestone mark in 2025, and about 716 million people are using cryptocurrencies around the world. Interestingly, India is leading in terms of grassroots crypto adoption globally, topping the annual Global Crypto Adoption Index by Chainalysis for the third year in a row. However, in spite of such a massive expansion, there exists a large portion of India’s population, comprising especially those over 35 years old, the poor, and the cautious middle class, who completely abstain from investing in cryptocurrencies. This study aims at understanding why. Employing a survey sample of 147 participants (aged between 18 50+), taken using the Google Forms platform and supplemented with secondary data, this study reveals major inhibitors to their adoption. As the key result from the survey indicates, regulatory uncertainty poses the most significant barrier to converting into crypto investments. Indeed, 56.5% of those surveyed mentioned more favorable regulations as a major factor in convincing them to switch to cryptocurrency investing. The importance of this finding lies in the fact that the recently suggested Indian COINS Act 2025 is aimed at introducing CARA and regulating the country's digital assets following the example of MiCA (EU) or the U.S. GENIUS Act. Price volatility comes in second, with 78.8% of the participants considering price stability "very important" in their investing decisions. In fact, three case studies on cryptocurrency scams show us that the scam event causes a “fear contagion” effect in terms of deterring investments even further than the actual victims. Together with the results of the survey, these case studies imply an urgent need for regulations, education, and proper media reporting.