Disrupting Money: Psychological Factors of Investment Biases in Cryptocurrency

Abstract

The presence of cryptocurrencies as means of trading and investing has presented new opportunities to make profits. Unfortunately, investment bias becomes a phenomenon that accompanies investing behavior for many people which actually results in losses and regrets. This study uses a narrative review method to identify cognitive, affective, and contextual factors that correlate with investment biases in cryptocurrency. The results of the review indicate that a number of factors - i.e. self-affirmation, anticipation of postdecision dissonance, fear of missing out (FoMO), overconfidence, perception of the investment process and regulation - play a pivotal role in explaining investment biases in cryptocurrency.