An In-Depth Investigation of Investor Decision-Making and Cryptocurrency Market Dynamics

Laeli Masruroh; Ray Octafian

doi:10.69693/jemaca.v2i1.23

Authors

Laeli Masruroh STIEPARI Semarang
Ray Octafian STIEPARI Semarang

DOI:

https://doi.org/10.69693/jemaca.v2i1.23

Keywords:

Cryptocurrency, Decision-Making, Investor, Market

Abstract

This study aims to analyze the factors influencing cryptocurrency investment decisions, identify effective risk management strategies, and investigate the impact of institutional investment on the cryptocurrency market. Using a qualitative approach with semi-structured interviews involving eight experienced crypto investors, the research found that psychological factors such as FOMO (Fear of Missing Out) and herd mentality significantly affect investment decisions, with 87.5% of participants exhibiting both biases. Although all participants (100%) were aware of the high risks of crypto investments, there was a clear gap between risk awareness and the implementation of adequate risk management strategies, with only 50% using stop-loss orders and 62.5% still relying on informal, intuition-based approaches. Portfolio diversification (87.5%) and dollar-cost averaging (75%) were the most commonly applied strategies. Institutional investor involvement has increased market legitimacy (100%) and stability (75%) but has also raised concerns about higher correlation with traditional financial markets (62.5%) and potential price manipulation (62.5%). This study identifies a significant educational gap, particularly in risk assessment and regulatory understanding, emphasizing the importance of financial education and technological literacy in the cryptocurrency investment environment.

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