The influence of behavioural biases on cryptocurrency adoption in South Africa

Abstract

South Africa’s investment landscape is being reshaped by fintech and decentralised finance, pressuring traditional financial institutions and accelerating retail interest in cryptocurrency. This makes it vital to understand the behavioural drivers behind adoption in an emerging market context. This study addresses a local research gap on how behavioural biases and financial literacy shape cryptocurrency adoption, and whether effects differ by age. The objective is to test whether herding, disposition effect, overconfidence, loss aversion and heuristics influence cryptocurrency adoption, and whether financial literacy moderates these relationships; a secondary objective tests life-stage (age) differences. A positivist, quantitative, cross-sectional design was used, which gathered responses through an online survey. Structural equation modelling and a one-way ANOVA were employed to understand the direction, strengths and significance of the relationships. Key findings indicate that herding and heuristics positively and significantly predict adoption. Disposition, loss aversion and overconfidence are not significant, while financial literacy shows no significant moderating effects. Age-group ANOVAs reveal no significant differences across behavioural factors or adoption. The implication is that South African investment platforms and institutions should anticipate socially driven and heuristic decision-making, embed pre-emptive nudges, simplify journeys, and target education where it reduces bias while recognising that age alone does not segment behaviour in this market.