The average millennial who deposits money in to cryptocurrency with the hope of making a substantial profit is naive, impulsive, short sighted and lacks sound critical thinking skills.
The Cryptocurrency market is volatile, as seen by the recent 200billion USD wiped off the market in less than 24 hours.
Any money deposited in to cryptocurrency needs to be deposited with the utmost care - thorough background research needs to take place before deciding which cryptocurrency or ico tokens to purchase.
If you purchase cryptocurrency without completing a thorough background analysis, you are gambling.
If on the other hand you do a thorough analysis, then you are investing.
There are two main reasons why individuals will gamble, as opposed to invest, in cryptocurrencys and ico’s.
Reason 1 : Impulsive purchasing due to Nucleus Accumbens activation overriding the Prefrontal Cortex.
The largely unconscious association between crypto currency and big profits leads to a burst of dopamine, which prevents the individual from thinking rationally - and leads to individual to negatively favour the reward of money over the risk of losing money.
Reason 2 : Fear of missing out. (FOMO)
FOMO is driven by a panic response, specifically by the amygdala and hPa axis triggering a cascade of neurotransmitters and stress hormones which down regulate the Prefrontal cortex. By downregulating the Prefrontal cortex, the individual cannot rationally analysis the risk reward ratio.
In summary, spending money on cryptocurrenies is a gamble if the money is spent before a thorough background analysis takes place. This occurs mainly due to a lack of foresight as a result of Prefrontal cortex downregulation.
In order to invest, as opposed to gamble, in cryptocurrencys, one needs to throughly undertake a rational and objective analysis of what the cryptocurrency offers and why it will continue to grow long term.
Cool calm and collected data analysis is necessary, with a focus on gaining an objective, relaxed vision of the pro’s and con’s of what the cryptocurrency has to offer
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