Blockchain technology and the cryptocurrencies that symbolize it; For some, it is one of many different investment tools, for others it is a system that can replace physical money and reshape the world order. Although many investors do not invest in cryptocurrency markets, they try to follow the cryptocurrency markets. Blockchain technology and cryptocurrencies have started to enter our daily lives in the last few years. Negative and negative information began to be heard in the news, in meetings with colleagues, in our environment and in social media.
Cryptocurrencies and this popular technology, which have been scrutinized in all aspects in discussions and research, have a psychological aspect that is often overlooked, but perhaps should concern us more than the daily transactions that take place. In this article, I will share with you how it affects human psychology, the decision-making processes and psychology of those who invest in cryptocurrencies.
Importance Of Psychology
Cryptocurrency; It is based on the principle of decentralized exchange of assets using blockchain technology. For this reason, the effect of investor psychology is too much because it does not depend on an authority. Because of this effect, cryptocurrencies are seen as very volatility and risky investments. The fluctuations created by social media phenomena in the crypto money markets also draw attention to the magnitude of these effects.
Crypto Culture
Investors see blockchain technology and cryptocurrencies as a phenomenon that will completely change the current collapsing world order. The sense of belonging or belonging to the culture brought by this new system can also be seen. For some investors, this currency has not only remained as an investment tool, but has created a new culture with new terminologies. Terms such as “Bull market”, “Coin”, “Token”, “Blockchain”, “Whale movement”, which mean nothing to someone who is not interested in cryptocurrency markets, are included in daily conversation. It has been observed that the common culture that develops in social groups and platforms created by altcoin users such as Bitcoin over the internet has had an impact on the car models that group members want to buy.
People in general feel the need to belong to a group. It is seen that some cryptocurrency investors also have this sense of commitment. Although this situation does not pose a social problem, it should not be overlooked; It is the close relationship of the concept of crypto money and its transactions with the financial situation of the person. For this reason, this sense of commitment can sometimes affect decision-making abilities in financial decisions. For example, an individual who feels that he belongs to a culture in this way may perceive the criticisms directed at the vehicle he invested in as if he was the one being criticized and display a defensive attitude. Therefore, they can take their financial decisions with a sense of social belonging instead of objective criteria and may encounter undesirable results in an unexpected price movement.
Influence Of Social Media
It has been seen that social media has a great impact on the popularity of crypto money. However, these effects are also open to some misunderstanding and manipulation. For example, on various social media platforms, we can come across stories of people who made money at a young age thanks to crypto money or families who made big gains with small investments. Such stories attract the attention of those who are interested in the subject and help them take action to invest in this direction. However, these stories we see also contain a mistake called "Survivorship Bias". All we see are the stories of successful people. Because the stories of unsuccessful people are not included in these platforms. In other words, while the stories of people who earn income with crypto money are frequently shared and kept on the agenda, people who are many times more than this number and who suffer losses disappear. This creates a perception as if everyone who invests in crypto money wins.
In addition, the use of social media for investment causes people to communicate for a long time only with people who share their own opinion. This, regardless of right or wrong, causes the ideas to be riveted and reduces the tolerance for critical views. In addition, while others are earning income, there is a feeling that they are missing out on a great opportunity, and this negative feeling can push people to make investment decisions without thinking properly.
In the studies, gambling, games of chance, people who bet are the ones who get the greatest happiness just before the result of the game they play, rather than winning. The reactions that occur in the brain during the expectation of winning the game are experienced more intensely than the reactions that occur when the game is won. This causes an addict to continue playing, no matter how much he wins. A similar behavior was observed in those who invested in the stock market. An investor who watches the ups and downs of the stock market may show similar reactions to an addict waiting for the result of the game. This can lead to an uncontrolled loss in the stock market. It is not surprising to see similar reactions in an area where there is a lot of volatility in cryptocurrencies.
My Last Words; Cryptocurrencies are now included in our lives in a way that no one can deny. Whether we see this new concept as an ordinary investment tool or as the greatest technology that will define the future, being more aware of the processes underlying our decision-making mechanisms will help us make more informed decisions.