Psychological Impact of Cryptocurrency Volatility on Investor Emotions and Decision Making

Abstract

Introduction: Introduction: The impact of cryptocurrency volatility on investor emotions and decision-making refers to how the erratic and swift price changes of cryptocurrencies can have an impact on investors' psychological states and ultimately influence their investing choices. Since the start of 2013, the cryptocurrency market has drawn a lot of attention from the media and academia due to its significant price fluctuations.

Methods: By examining the impact of behavioral finance characteristics on investment choices in the cryptocurrency market, this study focuses on Arab investors who invest in the market. Through the use of questionnaires and a snowball sampling technique, a quantitative approach was taken.

Result: The findings demonstrate that prospect theory, heuristic theory, and herding theory all significantly influence investors' choice to invest in the bitcoin market. This highlights the important part played by the suggested behavioral elements in influencing investors' investing choices. By combining the findings of other studies, this work adds to the body of existing research. Additionally, it boosts the ability of investors to make defensible decisions based on their grasp of the mechanics of the Bitcoin market.

Conclusion: The implications of the findings will help errant investors become increasingly ready to stay in the bitcoin market and advance their knowledge of the most effective way to make wise investment decisions. The results of this study will also motivate financial experts to acknowledge that knowledge of conventional finance theory is insufficient for success in the bitcoin market.