The Psychology behind Bitcoin

Good day dear Hive community, first of all I would like to welcome you all to my new post and hope you had a day that was full of positive experiences! In this post, I would like to discuss a psychological topic and hope you can expand your knowledge.

The decentralized cryptocurrency Bitcoin, which has now developed into one of the strongest goods in the digital world as well as a new form of culture, is more than one would like to assume and in this article, I would like to write between the lines and go into the psychological aspects behind it. One of the most important factors is the own relationship to Bitcoin and the behavior can be different from person to person and if someone is involved in Bitcoin directly, this person consider the whole thing quite differently as someone from outside and some the following psychological phenomena can also be transferred to other cryptocurrencies or financial markets, but I would like to focus on Bitcoin. As an investor of Bitcoin, you have to distinguish from different types and some have been behind it for years and others have only recently met it and with people who already know the market better, Bitcoin is usually seen in the long term and often have a certain immunity to feelings triggered by the rising or falling prices and especially with new investors, the emotions are much more pronounced and often there is huge uncertainty in certain situations of the market and they tend to think irrationally, which leads to making wrong decisions and a strong pressure is triggered. In general, when it comes to the market, there are two dominant emotions like fear and greed and when money is involved, the fear of experiencing losses or making wrong short-term decisions that are characterized by greed increases. This market is strongly influenced by the fear of missing out effect, which describes the phenomenon of being afraid to miss things and even you have no personal connection to Bitcoin yourself, this effect is often strongly present and if a person has learned, for example, from someone from the circle of acquaintances that profit has made with Bitcoin, these people as outsiders often have the fear of having missed something and this leads to a feeling of pressure.

Especially new investors do not yet know exactly how they can deal with these feelings and do not invest rationally and this often leads to the fact that they make wrong decisions and too many feelings are involved and so they do not pay attention to invest according to certain market cycles and let themselves be blinded by the spontaneous and negative feelings and of course these symptoms are also strongly linked to mass psychology. What is interesting behind the psychology of Bitcoin is that it is strongly influenced by the media and you often see people on social networks who want to sell you the next top investment or want to lead people in a certain direction which is particularly characterized by the uncertainty of young investors and it is important to always make your own picture and Bitcoin has developed over the years into a kind of religion and there are numerous interesting psychological aspects which are closely associated with the typical symptoms of mass psychology. It is very important to develop a rational mindset and many newcomers can be manipulated by short-term trading ideas and this leads in most cases to wrong decisions and it is best to get to know the cycle of the markets before you make too premature decisions yourself and those who believe in Bitcoin, do so also in the long-term perspective and the most rational you think when you buy it and keep it simple for a longer period of time and do not let yourself be blinded by short-term changes of the prices.

There is also often fear involved here and often it happens that people buy Bitcoin and sell it after short-term losses out of the fear of losing even more without suspecting that a positive price correction could come in a few weeks and therefore it is important to observe these cycles and first learn more about the psychology of the market. It can't be bad to invest bundled, so to divide the amount you want to invest and invest at monthly intervals than at a time, so you are safer from changes in the price and can also get a long-term picture of the cycle of the market and even if it should be specifically about Bitcoin in this post, it is important to diversify that means to buy more assets, however, I would like to mention that my contribution should not be advice for investments! It can definitely be said that Bitcoin is just as fascinating as the psychology behind it and the market is characterized by numerous psychological phenomena and of course other aspects such as the effect of the numbers, colors or other things can also be counted to it. Also the change of Bitcoin is extremely interesting from the point of view of the psychology of the mass and most no longer know the real aspects behind bitcoin and only see it as a kind of investment object and from the original aspects of cryptography Bitcoin has strongly turned away and if you want to learn more about the real origins of bitcoin which go back much further than until the publication of the whitepaper in 2008, I can recommend this contribution here where I went into more detail.

Many thanks for the visit and I hope you could learn something new about this topic! I captured these pictures with my Camera Sony Alpha 6000 plus 55-210 mm lens and took these screenshot from the websites https://coinmarketcap.com and https://bitcoin.org