The anchoring bias is when “an individual’s decisions are influenced by a particular reference point or ‘anchor’.”
● Bitcoin at $100: It’s too late to buy bitcoin
● Bitcoin at $1,000: It’s too late to buy bitcoin
● Bitcoin at $10,000: It’s too late to buy bitcoin
This trajectory actually demonstrates one way to de-bias the anchoring bias. Zoom out and choose a different anchor. You can also talk to more people to get a different perspective and anchor on a different number. Or you can also look across other similar areas and see that your anchoring number should not be an inhibitor. If you look at the stock market, was it too late to buy when the Dow was at 15,000? If bitcoin goes to $100,000, was it “too late” to buy bitcoin at $50,000?
Hindsight Bias Or “We Knew This All Along”
Next up is hindsight bias , “the common tendency for people to perceive past events as having been more predictable than they actually were.”
Source: geralt on pixabay.com
How many people claimed to know that bitcoin’s price would go way up all along, that it would hit $30,000, $40,000, $50,000? My bet is that those same people will be sitting pretty “knowing” that bitcoin will eventually reach$100,000, $150,000, $200,000.
Hindsight bias is one bias that all current Bitcoiners would like to experience about bitcoin’s price! No need to de-bias.
Let’s All Lead People Past the FUD
We’ve only looked at one set of biases around one area of bitcoin: price. Other areas to explore include biases such as authority, reactive devaluation and in-group or conformity biases with respect to high profile political, business and financial figures’ view of bitcoin.
We can also look at the availability and recency bias around the often unfactual focus on the “E”in the ESG (Environmental, Social, Governance) narrative, even though bitcoin also has huge “S” and “G” benefits. Yet another area is biases around ambiguity and functional fixedness, which affect thinking around the varied functions and utility of Bitcoin.
Most of the erroneous critiques about Bitcoin stem from biases and noise.
Understanding the bitcoin biases and what we can do to de-bias them is a road to better understanding, further adoption of Bitcoin and the better world we Bitcoiners think that will enable.
Biased or not.
This is a guest post by Heidi Porter. Opinions expressed are entirely their own and do not necessarily reflect those of BTC, Inc. or Bitcoin Magazine.