May 24, 2023, Paper: "We provide a first look into the factors that affect retail investing in cryptocurrencies. We use consumer transaction data to examine how household characteristics, liquidity shocks, and hedging requirements shape the crypto investment decisions of millions of U.S. households. We find that—similar to traditional investing—crypto investing responds to wealth, risk attitudes, and liquidity constraints. Yet, crypto investing is more responsive than after-tax traditional investment flows to overall market conditions. We then show that investors’ budget constraints affect crypto investing, in line with portfolio choice theories. We find that relaxing budget constraints through receiving stimulus payments increases crypto investing. Tighter future budget constraints due to higher expected inflation also increase crypto investing, consistent with hedging motives. Our findings are important for understanding this new high-risk, high-return asset class and designing effective regulations in this rapidly evolving space."