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Home/Glossary/Narrative fallacy
Psychology

Narrative fallacy

In shortOur tendency to explain random events with a neat story, and then trust the story too much.

"Bitcoin fell because of X" is usually written after the fact. Crypto narratives can be useful, but a good story is not the same as a good investment.

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  • Narrative fallacy
← NarrativeAll terms A–ZNFA →

Related terms

  • NarrativeA story or theme that attracts investors to a group of coins at the same time, such as AI, RWA or memecoins.
  • Confirmation biasSeeking out information that supports what you already believe and ignoring what contradicts it.
  • Survivorship biasDrawing conclusions only from the winners you can see, ignoring the many that failed.

More in Psychology

  • Anchoring bias
  • FOMO (fear of missing out)
  • Herd mentality
  • Illusion of control
  • Loss aversion
  • Overconfidence bias
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