BEHAVIOURAL BIASES IN BITCOIN TRADING

Abstract

This paper aims to propose some behavioural biases of trading in Bitcoin. It is review literature in the areas of behavioural finance that address issues related to Bitcoin to underpin the conceptual model. A conceptual model for understanding the behavioural bias that affects investing in cryptocurrency is proposed. The biases are herding, optimism, overconfidence, confirmation bias, loss aversion, and gamblers’ fallacy. This paper ought to fill the research gap on cryptocurrency from the behavioral perspective. This paper implies that prices and Bitcoin transactions are more determined by psychological factors.