Cryptocurrencies have gained dominance in the digital currency market as the number of investors is increasing day by day. Cryptocurrencies have emerged as highly sought-after assets among investors worldwide. Forbes reports that in 2024, the entire market capitalization of the cryptocurrency market has surpassed USD 3.64 trillion. The role of behavioral biases in investment decision-making within this area remains unexplored. This paper aims to fulfill this gap by addressing a literature review on the topic of behavioral biases and their impact on cryptocurrencies. It specifically emphasizes how behavioral biases, like herding behavior, overconfidence, loss aversion, fear of missing out, and several other biases affect investing decision-making in cryptocurrencies. This study has been done through an extensive literature review by synthesizing various research articles. To identify the relevant studies, databases such as Google Scholar, Scopus, and Web of Science have been used by employing different keywords like “behavioral finance,” “behavioral biases,” “cryptocurrency,” “investment,” etc. These studies have been reviewed and critically analyzed to identify the major biases, obstacles, and future research directions. This paper has shown that behavioral biases significantly influence investment decisions among cryptocurrencies. For instance, cryptocurrency does contribute to the herd mentality of the investors. Likewise, loss aversion bias significantly impacts investment decisions, suggesting that individuals fearful of financial loss tend to favor lower-risk ventures. Despite these insights, limited empirical studies focus specifically on cryptocurrency, highlighting a research gap that needs to be addressed. Future research will include the need for longitudinal studies to examine the importance of behavioral biases in cryptocurrency markets and the identification of regulatory interventions to mitigate irrational behavior. This study contributes to enhancing the understanding of cryptocurrency investment and provides fruitful insights to the researchers, practitioners, and policymakers by shedding light on the interaction of behavioral biases and cryptocurrency investment decision-making.