THE EFFECT OF HEARDING BIAS AND OVERCONVIDENCE ON CRYPTOCURRENCY INVESTMENT DECISIONS WITH FINANCIAL LITERACY AS A MODERATING VARIABLE (Study on Tokocrypto Official Group Community)
Main Article Content
Febrian Yoga Aditama
Surya Raharja
The development of cryptocurrency as an investment instrument is increasingly attracting the attention of investors, especially among the digital community. However, investment decisions in this asset are often influenced by psychological biases, such as herding bias and overconfidence, which can lead to irrational and high-risk decision-making. This study aims to analyze the effect of herding bias and overconfidence on cryptocurrency investment decisions, with financial literacy as a moderating variable. This study uses a quantitative approach with the Structural Equation Modeling (SEM) method based on Partial Least Squares (PLS) to test the relationship between variables. Primary data were collected through questionnaires distributed online to members of the Tokocrypto Official Group community with a sample of 100 respondents selected using the snowball sampling technique. The results of the study show that herding bias has no significant effect on cryptocurrency investment decisions, while overconfidence has a positive and significant effect on investment decisions. However, financial literacy is not proven to significantly moderate the relationship between herding bias and overconfidence on investment decisions. This finding indicates that even though investors have a good level of financial literacy, psychological factors still play a dominant role in making investment decisions in cryptocurrency. This study contributes to enriching the literature on behavioral finance by revealing the limited role of financial literacy in suppressing psychological bias in risky investment decisions. The practical implications of this study emphasize the need for investment education that focuses not only on financial literacy, but also on controlling psychological aspects in investment decision making.
Afriani, D., & Halmawati, H. (2019). The Influence of Cognitive Dissonance Bias, Overconfidence Bias and Herding Bias on Investment Decision Making. Journal of Accounting Exploration, 1(4), 1650–1665. https://doi.org/10.24036/jea.v1i4.168
Areiqat, AY, Abu-Rumman, A., Al-Alani, YS, & Alhorani, A. (2019). Impact of behavioral finance on stock investment decisions applied study on a sample of investors at Amman Stock Exchange. Academy of Accounting and Financial Studies Journal, 23(2), 1–16.
Armilia, N., & Isbanah, Y. (2019). Factors Affecting Financial Satisfaction of Financial Technology Users in Surabaya. Journal of Management Science, 8(1), 39–50.
Bias, O., Hanum, A., & Panuntun, B. (2023). The Influence of Herding Behavior, Cognitive Bias, and. 02(03), 112–129.
CHEN, H. (1998). An analysis of personal financial literacy among college students. Financial Services Review, 7(2), 107–128. https://doi.org/10.1016/s1057-0810(99)80006-7
Falahati, L., Sabri, M. F., & Paim, L. H. J. (2012). Assessment of a model of financial satisfaction predictors: Examining the mediating effect of financial behavior and financial strain. World Applied Sciences Journal, 20(2), 190–197. https://doi.org/10.5829/idosi.wasj.2012.20.02.1832
Hasibuan, BK, Lubis, YM, & HR, WA (2018). Financial Literacy and Financial Behavior as a Measure of Financial Satisfaction. 46(Ebic 2017), 503–507. https://doi.org/10.2991/ebic-17.2018.79
Narimawati, U. (2008). Qualitative and quantitative research methodology, theory and application. In Bandung: Agung Media (Vol. 9).
Nur Aini, NS, & Lutfi, L. (2019). The influence of risk perception, risk tolerance, overconfidence, and loss aversion towards investment decision making. Journal of Economics, Business & Accountancy Ventures, 21(3), 401. https://doi.org/10.14414/jebav.v21i3.1663
Nurbarani, BS, & Soepriyanto, G. (2022). Determinants of Investment Decisions in Cryptocurrency: Evidence from Indonesian Investors. Universal Journal of Accounting and Finance, 10(1), 254–266. https://doi.org/10.13189/ujaf.2022.100126
Qasim, M., Hussain, R.Y., Mehboob, I., & Arshad, M. (2019). Impact of herding behavior and overconfidence bias on investors' decision-making in Pakistan. Accounting, 5(2), 81–90. https://doi.org/10.5267/j.ac.2018.7.001
Sugiyono, P. (2011). Qualitative quantitative research methodology and R&D. In Alpabeta, Bandung.
Theressa, TD, & Armansyah, RF (2022). The effect of herding, overconfidence, and endowment bias on investment decisions of capital market investors. Journal of Business and Banking, 12(1), 35. https://doi.org/10.14414/jbb.v12i1.2989
Addinpujoartanto, NA, & Darmawan, S. (2020). The Effect of Overconfidence, Regret Aversion, Loss Aversion, and Herding Bias on Investment Decisions in Indonesia. Journal of Economic and Business Research, 13(3), 175. https://doi.org/10.26623/jreb.v13i3.2863
Budiman, I., Maulana, Z., & Kamal, S. (2021). The Influence of Financial Literacy, Experienced Regret, and Overconfidence on Investment Decision Making in the Capital Market. Journal of Strategic Management and Business Applications, 4(2), 321–330. https://doi.org/10.36407/jmsab.v4i2.282
Lathifatunnisa, & Nur Wahyuni, A. (2021). The Influence of Demographic Factors, Risk Tolerance and Overconfidence on Student Investment Decision Making in Pekalongan City. Journal of Applied Business, 5(2), 203–216. https://doi.org/10.24123/jbt.v5i2.4688
Mahadevi, SA, & Haryono, NA (2021). The Influence of Status Quo, Herding Behavior, Representativeness Bias, Mental Accounting, and Regret Aversion Bias on Investment Decisions of Millennial Investors in Surabaya City. Journal of Management Science, 9(2), 779. https://doi.org/10.26740/jim.v9n2.p779-793
Pranyoto, E., Business, E., Informatics, I., Nature, JZAP, Queen, NL, & Lampung, B. (2020). 1928-4438-1-Pb. 06(01), 29–43.
Sutikno, & Mery, R. (2021). Fundamental Analysis, Dividends, Overconfidence and Promotion
Afriani, D., & Halmawati, H. (2019). The Influence of Cognitive Dissonance Bias, Overconfidence Bias and Herding Bias on Investment Decision Making. Journal of Accounting Exploration, 1(4), 1650–1665. https://doi.org/10.24036/jea.v1i4.168
Areiqat, AY, Abu-Rumman, A., Al-Alani, YS, & Alhorani, A. (2019). Impact of behavioral finance on stock investment decisions applied study on a sample of investors at Amman Stock Exchange. Academy of Accounting and Financial Studies Journal, 23(2), 1–16.
Armilia, N., & Isbanah, Y. (2019). Factors Affecting Financial Satisfaction of Financial Technology Users in Surabaya. Journal of Management Science, 8(1), 39–50.
Bias, O., Hanum, A., & Panuntun, B. (2023). The Influence of Herding Behavior, Cognitive Bias, and. 02(03), 112–129.
CHEN, H. (1998). An analysis of personal financial literacy among college students. Financial Services Review, 7(2), 107–128. https://doi.org/10.1016/s1057-0810(99)80006-7
Falahati, L., Sabri, M. F., & Paim, L. H. J. (2012). Assessment of a model of financial satisfaction predictors: Examining the mediating effect of financial behavior and financial strain. World Applied Sciences Journal, 20(2), 190–197. https://doi.org/10.5829/idosi.wasj.2012.20.02.1832
Hasibuan, BK, Lubis, YM, & HR, WA (2018). Financial Literacy and Financial Behavior as a Measure of Financial Satisfaction. 46(Ebic 2017), 503–507. https://doi.org/10.2991/ebic-17.2018.79
Narimawati, U. (2008). Qualitative and quantitative research methodology, theory and application. In Bandung: Agung Media (Vol. 9).
Nur Aini, NS, & Lutfi, L. (2019). The influence of risk perception, risk tolerance, overconfidence, and loss aversion towards investment decision making. Journal of Economics, Business & Accountancy Ventures, 21(3), 401. https://doi.org/10.14414/jebav.v21i3.1663
Nurbarani, BS, & Soepriyanto, G. (2022). Determinants of Investment Decisions in Cryptocurrency: Evidence from Indonesian Investors. Universal Journal of Accounting and Finance, 10(1), 254–266. https://doi.org/10.13189/ujaf.2022.100126
Qasim, M., Hussain, R.Y., Mehboob, I., & Arshad, M. (2019). Impact of herding behavior and overconfidence bias on investors' decision-making in Pakistan. Accounting, 5(2), 81–90. https://doi.org/10.5267/j.ac.2018.7.001
Sugiyono, P. (2011). Qualitative quantitative research methodology and R&D. In Alpabeta, Bandung.
Theressa, TD, & Armansyah, RF (2022). The effect of herding, overconfidence, and endowment bias on investment decisions of capital market investors. Journal of Business and Banking, 12(1), 35. https://doi.org/10.14414/jbb.v12i1.2989
