DOI: 10.1556/2006.2021.00037
Thank you for reading this post, don’t forget to subscribe!ABSTRACT: Background and aims Crypto-currency trading is a rapidly growing form of behaviour characterised by investing in highly volatile digital assets based largely on blockchain technology. In this paper, we review the particular structural characteristics of this activity and its potential to give rise to excessive or harmful behaviour including over-spending and compulsive checking. We note that there are some similarities between online sports betting and day trading, but also several important differences. These include the continuous 24-hour availability of trading, the global nature of the market, and the strong role of social media, social influence and non-balance sheet related events as determinants of price movements. Methods We review the specific psychological mechanisms that we propose to be particular risk factors for excessive crypto trading, including: over-estimations of the role of knowledge or skill, the fear of missing out (FOMO), preoccupation, and anticipated regret. The paper examines potential protective and educational strategies that might be used to prevent harm to inexperienced investors when this new activity expands to attract a greater percentage of retail or community investors. Discussion and conclusions The paper suggests the need for more specific research into the psychological effects of regular trading, individual differences and the nature of decision-making that protects people from harm, while allowing them to benefit from developments in blockchain technology and crypto-currency.
– Crypto trading is a rapidly growing activity.
– It has the potential to be riskier for inexperienced traders.
– Crypto trading is a rapidly growing activity.
– It has the potential to be riskier for inexperienced traders.
– Crypto trading is a rapidly growing activity.
– It has the potential to be riskier for inexperienced traders.
Methods used:
– Crypto trading may be riskier for inexperienced traders influenced by media attention or FOMO sentiments.
– Research can inform consumer protections and potential regulation of trading platforms.
– The paper reviews the structural characteristics of cryptocurrency trading and its potential for excessive or harmful behavior.
– The paper suggests the need for more research into the psychological effects of trading and protective strategies for inexperienced investors.
– Examines risk factors and protective strategies in cryptocurrency trading
– Calls for more research on psychological effects and decision-making
– Paper reviews characteristics and risks of cryptocurrency trading.
– Explores psychological factors and potential protective strategies.
In this paper, the authors review the particular structural characteristics of crypto-currency trading and its potential to give rise to excessive or harmful behaviour including over-spending and compulsive checking.