The post How Prospect Theory Explains Investor Panic and Losses appeared on BitcoinEthereumNews.com. Home » Crypto News Calling Bitcoin a scam reflects investorThe post How Prospect Theory Explains Investor Panic and Losses appeared on BitcoinEthereumNews.com. Home » Crypto News Calling Bitcoin a scam reflects investor

How Prospect Theory Explains Investor Panic and Losses

Home » Crypto News


Calling Bitcoin a scam reflects investor psychology, not fundamentals, with prospect theory explaining panic selling after sharp drops.

‘;
}

function loadTrinityPlayer(targetWrapper, theme,extras=””) {
cleanupPlayer(targetWrapper); // Always clean first ✅
targetWrapper.classList.add(‘played’);
// Create script
const scriptEl = document.createElement(“script”);
scriptEl.setAttribute(“fetchpriority”, “high”);
scriptEl.setAttribute(“charset”, “UTF-8”);

const scriptURL = new URL(`https://trinitymedia.ai/player/trinity/2900019254/?themeAppearance=${theme}${extras}`);
scriptURL.searchParams.set(“pageURL”, window.location.href);

scriptEl.src = scriptURL.toString();

// Insert player
const placeholder = targetWrapper.querySelector(“.add-before-this”);
placeholder.parentNode.insertBefore(scriptEl, placeholder.nextSibling);
}

function getTheme() {
return document.body.classList.contains(“dark”) ? “dark” : “light”;
}

// Initial Load for Desktop
if (window.innerWidth > 768) {

const desktopBtn = document.getElementById(“desktopPlayBtn”);
if (desktopBtn) {
desktopBtn.addEventListener(“click”, function () {
const desktopWrapper = document.querySelector(“.desktop-player-wrapper.trinity-player-iframe-wrapper”);
if (desktopWrapper) loadTrinityPlayer(desktopWrapper, getTheme(),’&autoplay=1′);
});
}
}

// Mobile Button Click
const mobileBtn = document.getElementById(“mobilePlayBtn”);
if (mobileBtn) {
mobileBtn.addEventListener(“click”, function () {
const mobileWrapper = document.querySelector(“.mobile-player-wrapper.trinity-player-iframe-wrapper”);
if (mobileWrapper) loadTrinityPlayer(mobileWrapper, getTheme(),’&autoplay=1′);
});
}
function reInitButton(container,html){
container.innerHTML = ” + html;
}

// Theme switcher
const destroyButton = document.getElementById(“checkbox”);
if (destroyButton) {
destroyButton.addEventListener(“click”, () => {
setTimeout(() => {
const theme = getTheme();
if (window.innerWidth > 768) {
const desktopWrapper = document.querySelector(“.desktop-player-wrapper.trinity-player-iframe-wrapper”);
if(desktopWrapper.classList.contains(‘played’)){
loadTrinityPlayer(desktopWrapper, theme,’&autoplay=1′);
}else{
reInitButton(desktopWrapper,’Listen‘)
const desktopBtn = document.getElementById(“desktopPlayBtn”);
if (desktopBtn) {
desktopBtn.addEventListener(“click”, function () {
const desktopWrapper = document.querySelector(“.desktop-player-wrapper.trinity-player-iframe-wrapper”);
if (desktopWrapper) loadTrinityPlayer(desktopWrapper,theme,’&autoplay=1’);
});
}
}
} else {
const mobileWrapper = document.querySelector(“.mobile-player-wrapper.trinity-player-iframe-wrapper”);
if(mobileWrapper.classList.contains(‘played’)){
loadTrinityPlayer(mobileWrapper, theme,’&autoplay=1′);
}else{
const mobileBtn = document.getElementById(“mobilePlayBtn”);
if (mobileBtn) {
mobileBtn.addEventListener(“click”, function () {
const mobileWrapper = document.querySelector(“.mobile-player-wrapper.trinity-player-iframe-wrapper”);
if (mobileWrapper) loadTrinityPlayer(mobileWrapper,theme,’&autoplay=1′);
});
}
}
}
}, 100);
});
}
})();



Summarize with AI



Summarize with AI

Bitcoin (BTC) critics have returned to a familiar refrain, calling the asset a scam as it struggles to go back to the five-figure level it last enjoyed in mid-November.

However, crypto commentator Shanaka Anslem Perera has reframed the argument as a psychological response rather than a financial one, tying panic selling to Nobel Prize–winning prospect theory.

The Psychology Behind the “Scam” Label

In a November 17 post on X, Perera argued that steep corrections often push retail investors to search for explanations that match emotional pain. Prospect theory, developed by Daniel Kahneman and Amos Tversky and awarded the Nobel Prize in 2002, holds that losses feel roughly twice as painful as gains feel rewarding. And when Bitcoin, for example, drops 30% to 40% after euphoric buying, labeling it a scam becomes an emotional outlet.

The analyst cited data claiming that around 70% of retail traders who buy during rallies sell at a loss within a year, while long-term holders who kept Bitcoin for four years or more have historically avoided losses even when buying at cycle peaks.

He also pointed to shrinking drawdowns across cycles, from more than 90% in 2011 to about 50–60% in the current one, as evidence that volatility has been easing with maturity.

Perera’s assertions found some support among the online crypto community, with user Gary Krug stating that “Calling Bitcoin a scam is usually a response to emotional whiplash, not analysis.” He also added that markets punish impatience before they reward conviction.

Another account, Bitcoinfinity, questioned why investors struggle to build positions slowly, to which Perera replied that humans naturally chase quick gains. The key takeaway, according to the market observer, is that surviving Bitcoin’s cycles requires an extended time horizon, where traders shift from seeking quick gains to disciplined accumulation.

You may also like:

Market Strain and a Clash of Narratives

The “Bitcoin is a scam” framing has landed at a time the asset is entering one of its longest “extreme fear” readings, according to market trackers, giving critics fresh ammunition while reinforcing the psychological argument raised by supporters. Recently, prominent economist Steve Hanke claimed the asset has “zero fundamental value,” framing the current downturn as proof of a failing system.

The flagship cryptocurrency has fallen nearly 31% from its all-time high and briefly dipped near $85,000 earlier this week before rebounding toward $88,000, only to slip back to around $87,000 earlier today. According to veteran analyst PlanB, selling pressure is split between long-term holders still shaken by 2021, technical traders watching momentum indicators, and cycle-focused investors expecting further downside.

On the other side are buyers focused on fundamentals and institutional adoption, creating what he described as a stalemate until sellers exhaust themselves. That tug-of-war has kept Bitcoin lagging traditional assets in the one-year window, with data shared by Perera showing the digital asset with an ROI of -15% compared to Gold’s +65% and the S&P 500’s +14%.

However, over longer periods, BTC has significantly outperformed the two, starting at +422% ROI in the last three years against gold’s +141% and SPX’s +49%. Since its invention, BTC has achieved a return of more than 2 million % while its traditional counterparts have respectively only managed +167% and +447% in that time.

SPECIAL OFFER (Exclusive)

SECRET PARTNERSHIP BONUS for CryptoPotato readers: Use this link to register and unlock $1,500 in exclusive BingX Exchange rewards (limited time offer).

Source: https://cryptopotato.com/bitcoin-scam-myth-exposed-how-prospect-theory-explains-investor-panic-and-losses/

Market Opportunity
Scamcoin Logo
Scamcoin Price(SCAM)
$0.000885
$0.000885$0.000885
-0.33%
USD
Scamcoin (SCAM) Live Price Chart
Disclaimer: The articles reposted on this site are sourced from public platforms and are provided for informational purposes only. They do not necessarily reflect the views of MEXC. All rights remain with the original authors. If you believe any content infringes on third-party rights, please contact service@support.mexc.com for removal. MEXC makes no guarantees regarding the accuracy, completeness, or timeliness of the content and is not responsible for any actions taken based on the information provided. The content does not constitute financial, legal, or other professional advice, nor should it be considered a recommendation or endorsement by MEXC.

You May Also Like

MoneyGram launches stablecoin-powered app in Colombia

MoneyGram launches stablecoin-powered app in Colombia

The post MoneyGram launches stablecoin-powered app in Colombia appeared on BitcoinEthereumNews.com. MoneyGram has launched a new mobile application in Colombia that uses USD-pegged stablecoins to modernize cross-border remittances. According to an announcement on Wednesday, the app allows customers to receive money instantly into a US dollar balance backed by Circle’s USDC stablecoin, which can be stored, spent, or cashed out through MoneyGram’s global retail network. The rollout is designed to address the volatility of local currencies, particularly the Colombian peso. Built on the Stellar blockchain and supported by wallet infrastructure provider Crossmint, the app marks MoneyGram’s most significant move yet to integrate stablecoins into consumer-facing services. Colombia was selected as the first market due to its heavy reliance on inbound remittances—families in the country receive more than 22 times the amount they send abroad, according to Statista. The announcement said future expansions will target other remittance-heavy markets. MoneyGram, which has nearly 500,000 retail locations globally, has experimented with blockchain rails since partnering with the Stellar Development Foundation in 2021. It has since built cash on and off ramps for stablecoins, developed APIs for crypto integration, and incorporated stablecoins into its internal settlement processes. “This launch is the first step toward a world where every person, everywhere, has access to dollar stablecoins,” CEO Anthony Soohoo stated. The company emphasized compliance, citing decades of regulatory experience, though stablecoin oversight remains fluid. The US Congress passed the GENIUS Act earlier this year, establishing a framework for stablecoin regulation, which MoneyGram has pointed to as providing clearer guardrails. This is a developing story. This article was generated with the assistance of AI and reviewed by editor Jeffrey Albus before publication. Get the news in your inbox. Explore Blockworks newsletters: Source: https://blockworks.co/news/moneygram-stablecoin-app-colombia
Share
BitcoinEthereumNews2025/09/18 07:04
ServicePower Closes Transformative Year with AI-Driven Growth and Market Expansion

ServicePower Closes Transformative Year with AI-Driven Growth and Market Expansion

Double-digit growth, 50% team expansion, and accelerated innovation define 2025 momentum MCLEAN, Va., Dec. 18, 2025 /PRNewswire/ — ServicePower, a leading provider
Share
AI Journal2025/12/18 23:32
XRP Fractal Signals $6–$7 Surge by November Amid DLT Disruption

XRP Fractal Signals $6–$7 Surge by November Amid DLT Disruption

The post XRP Fractal Signals $6–$7 Surge by November Amid DLT Disruption appeared on BitcoinEthereumNews.com. XRP Fractal Analysis Hints at $6–$7 Breakout by Mid-November According to renowned market analyst EGRAG CRYPTO, XRP may be on the verge of a significant price movement. In his latest analysis, he points to a fractal formation pattern that suggests XRP could reach the $6–$7 range by mid-November.  Source: EGRAG CRYPTO This projection has quickly caught the attention of traders and long-term investors, as XRP’s current price remains well below this target. Fractals, often used in technical analysis, are recurring chart patterns that can help predict future price action by identifying historical similarities in market behavior.  Therefore, EGRAG CRYPTO argues that XRP is currently mirroring a previous structure that led to a notable rally. If this fractal setup plays out as expected, it could mark one of the most significant price surges for the digital asset in recent years. If XRP reaches $6–$7 by mid-November, it would mark a major win for investors and a symbolic breakthrough for a token that has endured regulatory battles and market volatility, validating its resilience and cementing its relevance in the evolving digital finance ecosystem. Meanwhile, a recent cup-and-handle pattern signalled that XRP had the potential of soaring to $15 by year-end with the altcoin presently trading at $3.04 per CoinGecko data.  DLT-Based Solutions: How Ripple and Stellar are Redefining Cross-Border Banking According to crypto observer SMQKE, distributed ledger technology (DLT)-based solutions are increasingly challenging the traditional correspondent banking model.  For decades, cross-border payments have relied on a chain of intermediaries, often resulting in slow settlements, high costs, and limited transparency. But with the rise of blockchain networks such as Ripple and Stellar, the industry is experiencing a seismic shift. The correspondent banking model depends on trust and pre-funded accounts, locking up liquidity and exposing banks to counterparty risk.  Transactions often take days to…
Share
BitcoinEthereumNews2025/09/19 16:12