The Interplay of Opinions and Behavior in Social Trading: The Dynamics of Early Cryptocurrency Adoption

This paper studies how the interplay of posting and trading behaviors within a social network influences an individual’s decision to adopt cryptocurrency. We exploit a unique dataset from a large social trading platform and find a pronounced social learning effect in cryptocurrency adoption. Individuals are more inclined to adopt cryptocurrency when their peers do, especially when the trading behavior of those peers aligns with their expressed opinions. When uncertainty or returns are high, investors tend to rely more on positive opinions, regardless of the actual trading behavior of others. We observe significant heterogeneity across user demographics: Users who are older, are more experienced, are more willing to take risks, and have higher incomes are especially responsive to credible signals from adopters. Younger users exhibit greater skepticism toward positive sentiment, possibly because of greater familiarity with noise in social media environments. Our results offer actionable insights for practitioners. Developers and marketers of emerging technologies can foster adoption by leveraging transparent, credible communication—preferably from peers whose actions are visible and aligned with their expressed opinions.