Last two decades have witnessed a significant shift in investor perspective from traditional finance to behavioral finance, which underlines the burgeoning interplay of cognition and emotions in financial decision-making. Irrationality among investors is unavoidable as behavioral biases play a vital role in determining investors' investing decisions in various markets. The psychological elements examined in this study are divided into two categories: heuristics and herding. The study's goal is to look at the impact of these biases on cryptocurrencies investors' investing decisions with risk tolerance as a mediator. A quantitative methodology is utilized, which includes a survey method as well as snowball sampling, resulting in 225 surveys from individual investors. In addition, we use SmartPLS to analyze the data and test the framed hypotheses. A significant impact of heuristics bias is found to be prominent in investing. The findings also highlight the importance of behavioral variables in investor decision-making. The association between behavioral biases and financial decisions is significantly influenced by risk tolerance. The verdicts' consequence is that hit and runs investors will be better equipped to stay in the cryptocurrency market and improve their skills in the most efficient way to make smart investment decisions. Likewise, the outcomes of this research will inspire financial experts to recognize that standard finance theory knowledge is insufficient to succeed in the cryptocurrency market.
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15 June 2023
RECENT ADVANCES IN SCIENCES, ENGINEERING, INFORMATION TECHNOLOGY & MANAGEMENT
6–7 May 2022
Jaipur, India
Research Article|
June 15 2023
Behavioral biases of investors in the cryptocurrency market
Shubhangi Gautam;
Shubhangi Gautam
a)
University School of business, Chandigarh University
, Gharuan, Chandigarh, Punjab, India
a)Corresponding author: [email protected]
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Pardeep Kumar
Pardeep Kumar
b)
University School of business, Chandigarh University
, Gharuan, Chandigarh, Punjab, India
Search for other works by this author on:
a)Corresponding author: [email protected]
AIP Conf. Proc. 2782, 020105 (2023)
Citation
Shubhangi Gautam, Pardeep Kumar; Behavioral biases of investors in the cryptocurrency market. AIP Conf. Proc. 15 June 2023; 2782 (1): 020105. https://doi.org/10.1063/5.0154194
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