The psychology of cryptocurrency investing: how the mind is essential in making money

Cryptocurrency appears to be one of the fastest-growing markets in the world. The current global population of crypto investors is now estimated to be over 106 million. As cryptocurrency exchange platforms become increasingly accessible, the entrance barrier, particularly for people with little experience in investment, is at an all-time low. It produces problems.

Problems​

Crypto investors can talk about crypto technical analysis, but psychology has the greatest impact on their behavior. Crypto coins lack statements of profit margins that might be used to estimate future returns. Instead, future value can only be based on whether investors believe that the coin has a good reputation and profile. Traditional methods of market analysis don’t stand up to the challenge of grasping the crypto market volatility.
This is why psychological factors lead investors to make unwise investment and trading decisions. If you know these factors, you can avoid many troubles.

Top psychological pitfalls crypto investors should avoid​

First-time crypto investors should know about psychological pitfalls that can lead to trouble.

Social reinforcement​

There is a strong culture of crypto influencers and advisors on platforms such as Instagram, YouTube, and Twitter. Promoters of crypto coins can show how much money they have already earned. They can use graphics to show the anticipated growth. They often promote their successes. This can serve to create a need for immediate action. But it doesn’t mean that you have to start an action.

The illusion of control​

You know that crypto investing is not entirely based on chance. Skill and strategy can make a difference in outcomes. This is why many investors overestimate the role that applying specific types of knowledge or skill might play in outcomes. In other words, crypto investors will, therefore, often falsely, infer continency between their actions and positive outcomes. As a result, it may contribute to greater risk-taking. This pitfall has led many investors to losses.

Fear of Missing Out (FOMO)​

The fear of missing out (FOMO) is one of the strongest psychological factors that appear to influence crypto investors. If the coin which crypto investors have purchased is going up rapidly, they may regret having not made a larger investment. If another unpurchased coin is going up that they had previously considered, they feel annoyed for having missed out on the opportunity. But when the bull run ends, the price falls 30–40% in a single day. You have to avoid this style of thinking.

Anticipated regret​

Many decisions are based on the desire to minimize anticipated regret.
Unfortunately, crypto investing allows people to observe the results of their decisions over a long period of time, for instance, investors know what coins they sold too early. For this reason, the act of commission and omission effects are both likely to be very strong. It is a challenge to avoid this pitfall, but you should do that.

Preoccupation​

Those who engage excessively in a particular activity like crypto investing often find it difficult to disengage from the activity. They continuously think about the activity (preoccupation) and monitor charts 24/7 or spend much time on social media. Preoccupation is a recognized feature of addiction.
This creates the potential for crypto investing in absorbing a considerable amount of time and potentially with a greater risk of disruptions to sleep and other daily commitments. You should avoid this pitfall for your health. Don't be addicted to regular scrutiny of price movements, news, and other online media about coin-related developments.

Conclusions​

Financial psychology research observes that crypto investors tend to make decisions based on certain psychological constructs. This leads to unwise decisions and losses.
Therefore, in order to gain a proper understanding of crypto investing, it is important to consider all available user-oriented information. The information arises from experienced and well-informed sources. Where can you find these sources? You can conduct your own research or visit the EvBlock site. EvBlock is not just a secure crypto exchange from Switzerland. EvBlock is a great source of information for first-time crypto investors

 

[saoussen5765]

It is in majority related to the big investor's decisions to spread memes for the small investors for buying or selling coins for their big benefit at the end of the way.