What Cognitive Bias do You Think Is Killing Your Crypto Portfolio
Cognitive bias is something we are all guilty of, its a psychological thing on how we process, interpret and act on things. We are always letting that decide our crypto decisions and it affects our crypto portfolio. I am guilty and I sure know that you are too. So lets look at some cognitive bias we are all guilty of, you might be excited to find out that you are not a lone in this and there is a name for some of these bias.
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One bias I know I am guilty of is the anchoring bias, this is the bias that is based on anchoring on the entitlement of a token’s performance because you feel cheated on. Let me explain better, I didn’t buy bitcoin because I didn’t buy ut at $3k, when it pumped to $10K, I still didn’t buy it because I was angry at myself that I didn’t buy at $3k why should I buy at $10k, why didn’t bitcoin wait for me to buy it at $3k. There I was staying mad at bitcoin and bitcoin kept on pumping, went from $10k to $15K to $30K to $50K and to $60k. I missed out and I anchored on that feeling and allowed that influence my crypto portfolio and that is not the only coin I have done this too? Done this on a lot of coins and I need to learn to choose a coin based on its potential not on its past.
Copy Survivorship Bias, although, while I am not guilty of this cognitive bias, I have seen a lot of people that are guilty of this bias and most times it doesn’t favour them and they fail. This is a biased based on seeing someone else covert $80 to $3,000 on some shitcoin or memecoins, all of a sudden you start investing on just shit memecoins because you are also looking for the opportunity of converting a two figure to a four figure. There are about hundreds of memecoins getting released everyday the chances of them making you four figures is slimmer than investing in a utilised token or coin.
Sunk cost bias is another bias that makes us lose and affects our crypto investment, this particular one can make or break you, its also called buying the dip. When you keep buying the dip because you dont want to lose your initial investment, you invested on some project with $1k and now you investment is worth $120, instead of taking your loss and go, you put $500 more. If its a good project, it will make you more profit when it recovers, but if it is a failed investment, you are just going to keep losing.