The Impact of Digital Literacy, Financial Literacy, and Social Media on Investment Decision in the Cryptocurrency Market (A Comparative Study of Indonesia Millennials and Generation Z)

Kevinia, Mayumi Amran (2024) The Impact of Digital Literacy, Financial Literacy, and Social Media on Investment Decision in the Cryptocurrency Market (A Comparative Study of Indonesia Millennials and Generation Z). Masters thesis, Universitas Andalas.

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Abstract

This study investigates how digital literacy, financial literacy, and social media affect the investment decision-making of Indonesian Millennials and Generation Z, using the theories of planned behavior and reasoned action as a framework. It starts with a comprehensive literature review, emphasizing the importance of financial literacy in risk reduction and informed decision-making, as well as digital literacy's role in navigating financial data, while also highlighting social media's influence on public opinion and investment trends. The study uses structural equation modelling (SEM) to analyze data from a survey conducted with this demographic from August 24 to August 27, 2024, with a sample size ensuring representativeness of those often unfamiliar with cryptocurrency principles. The research addresses four key questions: how digital literacy, financial literacy, and social media influence cryptocurrency investment decisions, and how these factors, mediated by behavioral intention, impact decision-making. The findings indicate that digital literacy enhances investment decisions by improving access to financial information, while financial literacy is essential for risk reduction. Social media significantly influences investment decisions by shaping behavioral intentions and public perception. The study concludes that understanding social media, digital literacy, and financial literacy is crucial for informed investment decisions in the cryptocurrency market, highlighting the need for continuous education and resources to improve literacy and offering practical implications for investors, financial institutions, and policymakers. It also emphasizes the importance of social media awareness in shaping investment trends and behaviors.

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