A new one questionnaire van Kraken revealed that 63% of US crypto holders believe emotional decision-making has had a negative impact on their portfolios, with fear of missing out (FOMO) and fear, uncertainty and doubt (FUD) playing a major role.
The survey, which collected responses from 1,248 crypto investors, found that 84% had made decisions influenced by FOMO, and 81% traded based on FUD. Missing significant price increases emerged as the top emotional trigger for 60% of participants, compared to 17% who feared missing price drops.
The findings underscore how emotions continue to drive trading strategies in the volatile crypto market, especially as crypto becomes an increasingly important part of investors’ portfolios.
FOMO and FUD
FOMO, the fear of missing out on a profitable opportunity, often drives investors to trade impulsively, especially during market highs. The survey found that 58% of crypto holders regularly make decisions influenced by FOMO, with 26% occasionally succumbing to its effects.
FUD, on the other hand, often causes hesitation or panic. Despite this, many respondents acknowledged that their responses to these emotions had caused them to miss long-term opportunities. In fact, 88% of investors said they felt they had missed out on big gains.
Age and gender differences play a role in emotional investing. Investors aged 45 to 60 were the most likely to feel they had missed early gains (78%), but were also the most optimistic about the future, with 74% expressing confidence in significant future returns.
There were also clear gender differences, with men more likely to report decisions based on FOMO (66%) than women (42%). Male investors also expressed more regret, with 70% believing they had missed big gains, compared to 48% of female respondents.
Influence of social media
Social media has emerged as a major factor influencing trading behavior.
Of respondents who relied on platforms like Twitter or Instagram for market insights, 85% reported significant portfolio impact from emotional transactions. The rapid flow of information often amplifies FOMO and FUD, making it challenging for investors to maintain a rational approach.
Despite the challenges, many investors are turning to strategies designed to reduce impulsive decisions. The survey shows that 59% of respondents use dollar-cost averaging (DCA), a method that involves investing regularly regardless of price fluctuations.
Other tools gaining traction include automated recurring purchases, custom orders to target specific prices, and AI trading bots to eliminate emotional biases. These strategies help investors focus on long-term goals rather than reacting to short-term market movements.
Despite the prevalence of FOMO and FUD, 84% of respondents remain hopeful about the future of crypto. Older investors, especially those aged 45 and over, showed the highest levels of optimism, with many believing significant gains were still ahead.