Heuristic Bias and Herding Behavior for Predicting Investor Decision in Cryptocurrency Trading.

In the age of Business 4.0, cryptocurrencies have emerged as a popular alternative investment vehicle. Despite significant risks, they offer attractive perks. Poor decision-making can lead to investment losses, prompting this study to explore factors influencing cryptocurrency investment decisions. Using a quantitative methodology, data was collected from 106 respondents through questionnaires on popular bitcoin brokerage forums. The analysis employed structural equation modeling partial least squares with Smart PLS 4 software. Multiple group analysis was conducted based on investment experience (less than two years vs. more than two years). The results show that risk tolerance significantly affects investment decisions in cryptocurrency. For respondents with over two years of experience, heuristic bias impacts both risk tolerance and investment decisions, while herding behavior only affects risk tolerance. For those with less than two years of experience, heuristic bias influences investment decisions but not risk tolerance, and herding behavior has no significant effect on either. [ABSTRACT FROM AUTHOR]