Consumer Behavior and Risk Mitigation in Cryptocurrency Use

This report analyzes consumer behavior theory and how it affects the sales of a company. It also evaluates the risks involved in cryptocurrency use and how buyers can mitigate them. The report covers the psychology of consumer behavior, including perception, motivation, learning, attitude, and belief. It also discusses the risks involved in cryptocurrency, such as volatility, lack of regulation, errors or hacking, and protocol dilation. Finally, the report explains how buyers can mitigate these risks by conducting research, evaluating alternatives, and making informed purchase decisions.

Consumer behaviour

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Consumer behaviour theory.........................................................................................................3
2a Risk involved in cryptocurrency use.......................................................................................4
2b buyers mitigate the risk in consumer buying process.............................................................5
CONCLUSION................................................................................................................................6

INTRODUCTION
A consumer behaviour can be defined as a study of human behaviour, group and organization
where all the activities are associated with buy, sales and use disposal of goods and services.
Moreover, the consumer behaviour may include their emotions, preferences and attitude that gets
affected due to buying behaviour of the company. This report is the based on the cryptocurrency
case study (Ter Ji-Xi, Salamzadeh and Teoh, 2021). Crypto can be defined as a accumulation of
the binary data that is designed to perform as the medium of exchange. This report will cover the
consumer research theory that is phycology. Further, it also evaluates the risk which are involved
in the cryptocurrency. This will also analyse how buyers can mitigate the risk in the consumer
buying process.
MAIN BODY
Consumer behaviour theory
Consumer behaviour is the study of group, individual person and organization. It is also analysed
how consumer emotion, attitude and preferences affect the buying behaviour of the company.
Psychological theory: this theory includes different factors that is perception, personal attitude
towards the situation and the ability to understand information (Ter Ji-Xi, Salamzadeh and Teoh,
2021). Moreover, the motivation also affects the behaviour of the consumer.
Motivation: it is the most important and the primary factor of the phycological factor. As
motivate affect the buying behaviour of the consumer. Moreover, it has explained in the mallow
hierarchy theory that motivation drives people to satisfy their needs. While buying the
cryptocurrency, consumer analyse their need and wants to make huge profit before taking any
decision to purchase.
Perception: perception also play crucial role while purchases any product. What is the consumer
view towards the product and services? If it is positive then consumer automatically purchase but
if it is negative then the consumer will not prefer to buy it (Breidbach and Tana, 2021).
Moreover, perception is the process in which best product get selected out of the available
alternatives. Customer positive and negative perception plays crucial role in purchasing
cryptocurrency.
Learning: the individual learning also plays crucial role while selecting any product. Consumer
learning is totally depended on its interest and skill and knowledge. This skill or knowledge get

develop by the continuous practice. With the help of this experience, consumer draw out line
about the certain perception and this will decide the company's sales. As consumer got profit in
cryptocurrency then the experience toward to purchasing it becomes also positive.
Attitude and belief: the individual have certain belief and attitude toward the product and
services. It is basically the response towards the product and services (Albayati, Kim and Rho,
2020). As consumer has a belief toward the cryptocurrency is negative such as high risk, block
capital etc. than the buying decision get change.
Micro and the marc factors of the consumer behaviour affect the growth and sales of the
company. In the macro factor of the consumer include industries, companies, client and
competition whereas the micro factors represent the competitors and suppliers, customers.
Due to the micro and the macro factor the sales of the company get affected. Moreover, the
macro factor salsa includes
2a Risk involved in cryptocurrency use
Consumer risk can be defined as the risk which are related to the consumer-oriented product
such as the quality of product is not giving up to the mark facility. There are different types of
theories and models of the consumer risk. Out of this perception is the most important risk
which need to be analysed (AL-QURAISH and Sakulkijkarn, 2021). Perception of the risk is to
be identified as one of the pivotal aspects of the consumer behaviour. In cryptocurrency the
consumer has a perception that there is high risk as its value get steeply down any time as
negativity information has come. Moreover, the market is uncertain about the future and people
are unable to predict the future situation. So, this will create the negative impact on the crypto
sells.
Risk which are involved in the cryptocurrency
Volatile: due to the unexpected changes in the market situation, lead to sudden move in the
cryptocurrency. That is why people think more before taking the decision of investing in it.
Unregulated: crypto currency is exchanged in the unregulated market where there is no
involvement of government and central body (Geng, 2017). It creates a safety and security risk
of capital which consumer want to invest.

Error or hacking: Error (human) and the hacking is the big problem which are connected to the
technical world. But there is no perfect solution in order to prevent the human error and the
technical glitches.
Dilation due to the compensation: crypto currency is the based on the protocol that govern the
peer-to-peer conversation with the consumer or user. But due to competition, user as the protocol
may result in dilation.
All this risk creates a negative impact on the consumer behaviour while taking the decision.
Moreover, this will change the perception of the consumer.
2b buyers mitigate the risk in consumer buying process
Consumer buying process involved certain steps which are required to analyse the before taking
any decision of producing of goods. These stages are problem identification, information
research, evaluation of alternatives, purchase decision, purchase and post purchase evaluation.
Problem identification: it is required to identify the risk which are involved in the buying the
cryptocurrency. These problems are related to the high risk, loosing capital, no government
body, lack of market research etc.
Information research: consumer conduct the research through which it can find the best way to
save their capital. Research and article help the consumer to take right decision. Moreover,
before going ahead with the any of the investment decision in the crypto currency it is required
to get updated with the news and article to analyse the advantage and disadvantage of it (Arias-
Oliva, Pelegrín-Borondo and Matías-Clavero, 2019). Moreover, this will give as chance to think
in the different way so that right decision can be formed. In addition to this, consumer need to do
market valuation for the analysing the micro and the macro factor of it.
Evaluate the other alternative: consumer can mitigate the risk by finding some other
investment option along with it. While taking the decision of purchasing crypto currency,
customer need to adopt one more option of investment where there is assurance of fixed the
amount of return for the future. This will help to mitigate the risk, as when the prices of the
cryptocurrency get decreased this saves the amount of capital. This will help to maintain the
balance of profit and the loss.
Purchase decision: at this stage consumer take purchasing decision after analysing all the
positive and the negative points. Finally, consumer decided to purchase cryptocurrency.

Purchase: At this stage consumer finally take the decision of purchasing cryptocurrency. Then it
will analyse the profit and loss which is going to occur and reduces the risk by taking efficient
decision.
CONCLUSION
This report has analysed the consumer behaviour which is important to determine the sales of the
company. Cryptocurrency is the new form of currency which facilitate in the exchanging and
product and services. It is the technical form of the currency. But their many risks which are
present in this. Before taking any decision consumer need to check whether it is feasible or not.

REFERENCES
Books and journals
Arias-Oliva, M., Pelegrín-Borondo, J. and Matías-Clavero, G., 2019. Variables influencing
cryptocurrency use: a technology acceptance model in Spain. Frontiers in
Psychology, 10, p.475.
Geng, D., 2017. How technology Is reshaping financial services: Essays on consumer behavior
in card, channel and cryptocurrency services.
AL-QURAISH, P.M. and Sakulkijkarn, W., 2021. TECHNOLOGY ACCEPTANCE, ONLINE
CONSUMER BEHAVIOR, AND RISK PERCEPTION RELATED TO DECISION-
MAKING ON USING CRYPTOCURRENCY AMONG CONSUMERS IN THE
BANGKOK METROPOLITAN AREA.
Albayati, H., Kim, S.K. and Rho, J.J., 2020. Accepting financial transactions using blockchain
technology and cryptocurrency: A customer perspective approach. Technology in
Society, 62, p.101320.
Breidbach, C.F. and Tana, S., 2021. Betting on Bitcoin: How social collectives shape
cryptocurrency markets. Journal of Business Research, 122, pp.311-320.
Ter Ji-Xi, J., Salamzadeh, Y. and Teoh, A.P., 2021. Behavioral intention to use cryptocurrency in
Malaysia: an empirical study. The Bottom Line.
Online reference
What Is Consumer Behavior?, 2021. [online]. Available through<
https://clootrack.com/knowledge_base/what-is-consumer-behavior/>