In the latest study conducted by the Department of Applied Social Sciences at the Hong Kong Polytechnic University, it has been revealed that a significant majority of crypto investors in Hong Kong are driven by the pursuit of short-term returns, belief in the trendiness of virtual assets, and a fear of missing out on investment opportunities.
Inertial Thinking Patterns Among Hong Kong Crypto Investors
The study, commissioned by the Investment Committee and outlined in the “Retail Investor Research 2023,” sheds light on the behavior and attitudes of virtual asset investors in the region. The survey, which involved a diverse range of participants, found that 75% of respondents invest in cryptocurrencies to secure short-term returns. Meanwhile, 74% believe crypto-assets represent a current investment trend, and 73% express concerns about missing potential investment opportunities.
Despite the prevalence of these motivations, the study also indicates that most virtual asset investors possess good financial management knowledge. This seemingly paradoxical situation further explores the psychological and cognitive aspects that influence investment decisions.
The research delves into inertial thinking patterns among crypto investors, highlighting several common cognitive biases. The identified shortcuts include availability, where investors tend to rely on readily available, easy-to-recall, and familiar information; anchoring, involving an excessive emphasis on past information, such as initial offering prices; and overconfidence, where investors overestimate their abilities and blindly believe in their capacity to outperform the market.
The study categorizes these thinking shortcuts into five distinct types, each susceptible to cognitive biases. These types are labeled as the “Following the Trend Type,” the “Snake Bite Obedient Type,” the “Own Experience Type,” the “Intuition Expansion Type,” and the “Wishful Thinking Type.”
“The Retail Investor Research 2023” underscores the importance of understanding these cognitive biases to make informed investment decisions. While most virtual asset investors display good financial management knowledge, there is a call for continued improvement and review of financial management behaviors and attitudes.
Nevertheless, the insights from this study provide valuable information for investors, regulators, and industry stakeholders alike. It remains to be seen how these findings will impact decision-making and risk management strategies within the dynamic world of virtual asset investment in Hong Kong.
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