Cryptocurrency Investment Behavior distortions: A perspective

The cryptocurrency world has experienced great growth and volatility over the last decade. As a result, many investors have appealed to digital currencies as an opportunity to diversify their portfolio or participate in the high growth market. However, great success causes a high risk, and investing in cryptocurrencies also causes a variety of behaviors, which can lead to poor decision making.

What are the distortion of behavior?

Behavioral distortions indicate mental references or heuristics that people use to make decisions, often disregarding the consequences of their actions. This bias can be found or learned through experience and play an important role in investing decisions.

Types of behavioral distortion in investing cryptocurrency

Numerous behavioral distortion affects investors in the cryptocurrency market:

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Confirmation Distribution

: This bias includes the search for information that enhances our existing beliefs related to cryptocurrencies, ignoring or damaging contradictory evidence.

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• Apply to heuristics : For this bias, investors overestimate the importance of the latest events or changes that are easier to reach online.

• After spectacular bias : If you experience a successful investment, some people may think they knew better all the time and were forced to re -evaluate their opinion and change their strategies accordingly.

How can you help cryptocurrency investment distortions?

Artificial Intelligence (AI) can greatly help investors in cryptocurrency:

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s real examples of behavioral distortion

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Conclusion

Behavioral bias is part of the investment process, but can help analyze large data sets, set models and make individualized recommendations. Understanding these bias and using AI technologies, cryptocurrency investors can reduce their risks and make more reasonable decisions on their investments.