This comprehensive study investigates the trust-volatility paradox in cryptocurrency investments, exploring how perceived risk and market fluctuations influence investor decisions. The research employs a mixed-methods approach, combining quantitative survey of investors from diverse demographic backgrounds with experimental simulations designed to replicate various levels of market volatility. Quantitative data are analysed using Structural Equation Modelling (SEM) to examine relationships between perceived volatility, investor trust, and investment behaviour, while ANOVA and regression analysis assess the impact of different volatility scenarios. Key findings reveal that heightened perceived volatility reduces investor trust, with perceived risk acting as a mediator in this relationship. Furthermore, trust serves as a moderating factor that shapes risk tolerance and investment decisions, particularly in volatile market conditions. These insights offer practical implications for investors seeking to navigate cryptocurrency volatility, financial advisors developing risk management strategies, and regulators aiming to foster a more stable investment environment. This research contributes to the growing field of behavioural finance by enhancing our understanding of how psychological factors influence investment behaviour in emerging digital asset markets.