Published Online:March 2026
Product Name:The IUP Journal of Financial Risk Management
Product Type:Article
Product Code:IJFRM010326
DOI:10.71329/IUPJFRM/2026.23.1.5-23
Author Name:Mohammed Nabeel K and M Sumathy
Availability:YES
Subject/Domain:Finance
Download Format:PDF
Pages:5-23
This paper explores the moderating role of regularity perception in the relationship between risk perception and investment decision-making of cryptocurrency investors in Kerala, India. The study used primary data collected from 393 respondents using snowball sampling technique. The three constructs—regulatory perception, risk perception and investment decision—were measured using a five-point Likert scale. The moderation effect of regulatory perception was examined with the help of an interaction method, which is a suitable method when the moderating variable is continuous. The study found a significant positive relationship between investment decision and risk perception, and further demonstrated that regulatory perception strengthens this relationship, proving that investors’ reaction to perceived risk is contingent upon the interpretation of regulatory frameworks. The findings of the study contribute to behavioral finance by explaining how investors’ perception about regulations can influence their investment decision in evolving cryptocurrency market. The study links the traditional risk-based investment models with concepts from regulatory economics, explaining how rules and regulations affect investor behavior. From a practical point of view, the results highlight that clear regulations, transparent communications, and efficient compliance practices are vital for cryptocurrency markets and policymakers. These factors help build investor confidence and trust, lower perceived risk, and support overall market stability. These understandings are particularly helpful for policymakers, regulatory institutions, and other market participants in the emerging and partially regulated cryptocurrency markets.
In recent times, cryptocurrencies have emerged as a disruptive asset class by attracting both experienced and new investors across world. The high volatility, coupled with decentralized governance and budding regulatory frameworks, makes cryptocurrencies one of the riskiest asset classes. Unlike the traditional financial instruments, cryptocurrency prices are largely influenced by behavioral factors, particularly among retail investors, who make investment decisions based on their emotions, perceptions, and social cues rather than rational judgments.