I observed a few anxious questions on social media. “ ” Why is Bitcoin not recovering? “ ” Any reason why ripple’s price is tumbling? Will it recover? I was troubled because I understand the psychological pressure to some level. A few had invested earnings of their lifetime and some even mortgaged their houses. If you know someone of that sort, I urge you to read this article and if my reasons make sense, please persuade them to cash out their investment. I am not talking about people who have invested reasonably. But, those who have no experience in trading, those who were victims of the “ ” scheme, and those who don’t understand the risks of the crypto market. Get rich quick I am not an expert who can tell you if Bitcoin is a bubble or not. But, if it turns out to be a bubble, then there would be depression, in worst case suicides. I hope we could prevent that to some extent. I was too late to accept and realise, otherwise this would have been written much earlier. Invention of Bitcoin was a game changer, it’s underlying technology Blockchain will surely impact the world positively. But_,_ we forget to ask if the intentions of the invention still hold true? It was invented to bank the unbanked, to help the immigrants, to support the poor, etc. Let us have a reality check. What is the truth? Has it helped the greedy or the needy? Did it help the criminals or the innocent? I could be wrong ( ). I will come out as a fool to write such an article. But, I would take my chances since I have little to lose. I am only requesting you to consider one question, I pray I am If the fear of the skeptics is true, what would be the results? “Whoever trusts in his own mind is a fool, but he who walks in wisdom will be delivered.” Proverbs 28:26 Our mind works against us. It tricks us into making a foolish decision. I would like to point out the common psychological biases which one could be a victim of while investing in Bitcoin. These biases also holds good for every decision we make. They are so powerful in deceiving us even though we have studied them. You can study about these biases in the books or . Seeking Wisdom The Art of Thinking Clearly lost Joe was on his way home. He noticed a bunch of people near his friend’s tea shop. He decided to check it out. It was a three-card monte stand. As the dealer saw Joe, he asked “Do you want to see if it’s your lucky day? Why don’t you put $1 and find out?” The game was simple, Joe had to keep track of the target card as the dealer rearranges it quickly. If he wins, he will double his money. If he doesn’t he will lose his money. He decided to give it a try. On his first try, he put in $1. He was correct he got $2 back. He repeats again with $10, $50. He continues to win. He thought he had some special ability. A gift. This time he puts in $500. When the dealer revealed the target card, Joe’s happy face turned serious. The dealer comforted Joe “Don’t worry, Why don’t you try again? You have only once but won thrice?”. Joe puts another $500 only to lose. Reward When we are rewarded for an action, we are likely to repeat it again. The first three times, dealer allowed Joe to win. His action was reinforced. In the case of bitcoin, in 2013 it was around $300, a year ago $1000, last month it raised to $19k. If a beginner would have invested during the timeline, there is a possibility he has developed an addiction. This could cause him to make a riskier bet. Consistency Joe could have walked away instead of betting again. He wanted to convince others he was right. That made him bet the last $500 in his pocket. There are some people who are thinking “ ”. Most of us at some point have invested time or efforts into some projects even though the results were poor. Once we realise we are in a hole, we must try to come out rather than continuing to dig. Presently the price of bitcoin is at $14K . One can still benefit by selling at least some of the coins. I don’t want to face a loss selling my declining bitcoins. I must prove that I am right Overconfidence “All men think all men mortal, but themselves.” Edward Young We often consider ourself more intelligent than others. In Joe’s case, initial success made him overconfident. “ ” he thought. I want people to consider the possibility of being wrong. We should consider these questions “ ” I have won three times in a row, I must be special, What if I am wrong? What will I lose? Can I handle it? Alice was eagerly waiting for Joe’s return. They had planned a romantic evening. She started wondering what made Joe late? Suddenly, she heard the doorbell chime. She ran towards the door only to see Joe upset. “What happened?” she asked. “That dealer, he cheated me” he shouted angrily. Self-Deception “It’s easier to fool people than to convince them that they have been fooled.” Mark Twain Joe didn’t accept that he made a mistake. He instead blamed the dealer. The first step towards rectifying a mistake is acceptance. There are people still believing bitcoin’s price would magically rise. They need to consider the cost of denial. Social Proof ‘’But everybody else is doing it.” Some people would have invested because of the peer effect. If you hang out with a group of smokers you are likely to become one. One of the most disturbing events happened on Nov 18, 1978, . The members of the Peoples Temple drank poison on the advice of their spiritual leader. Social proof is one of the reasons, they decided to die rather than being alienated from the group. Remember, The Jonestown Massacre If a million people say a foolish thing, it is still a foolish thing -Anatole France. Confirmation Bias We often see what we want to see. We often try to find evidence to support our beliefs or hypothesis. You will find results in google for “ ” and “ ”. But, most people are likely to search and see only the former. I request them to find evidences against their decision and understand the risks. I have only mentioned only some of the biases. But, I hope you get the point. Reasons to invest in Bitcoin Reasons not to invest in Bitcoin Their confirmation bias could blind them from seeing this article. That is the reason I am relying on their friends. “I have lost all my savings, I am sorry to disappoint you”, Joe ended the story. Alice could see the tears welling up, she hugged him tightly, “It is okay, I haven’t lost you”. Don’t rely on expert predictions. Remember the previous presidential election. Probably in the long run Bitcoin might make it. The question is how long? Maybe in five years, maybe ten. One should ask “Can I sustain till then?” My next story will be about how to benefit by learning bitcoin’s underlying technology, the Blockchain. Follow and me ( ) so that you don’t miss out on them. I don’t put my content behind a paywall. If you like my content, you can support me by . Hackernoon Febin John James buying me a coffee
