“All are investing in Crypto, I fear of being missed out”: examining the influence of herding, loss aversion, and overconfidence in the cryptocurrency market with the mediating effect of FOMO

The study's purpose is to examine the effect of herding, loss aversion, overconfidence, and fear of missing out (FOMO) biases on crypto investors’ investment decisions. The study also looks at how FOMO plays a mediating role between herding, loss aversion, overconfidence, and crypto investment decisions. To acquire data from crypto retail investors, the study used a questionnaire survey. A total of 473 responses were gathered and analyzed with SmartPLS. To achieve the study's aims, factor analysis and partial least square structural equation modelling were used. The study's findings found that FOMO, herding, loss aversion, and overconfidence biases have a substantial effect on the investment decisions of crypto investors, in respective order. In addition, FOMO bias establishes a complementary partial mediation on the relationship between herding, loss aversion, and crypto investors’ decision-making behavior. Ergo, the present study assisted individual and institutional cryptocurrency investors, crypto portfolio managers, policymakers, researchers, and market regulators in broadening their knowledge base about cryptocurrency and forecasting investors' behavior. Hence, this study contributes to the field of behavioral finance.