Survey: 63% of crypto holders say FOMO or FUD negatively impacted their strategy
Key takeaways 🔑
- 63% of U.S. crypto holders report that they believe emotional decisions have negatively affected their portfolios.
- A staggering 81% of U.S. crypto holders reported that they have made investment decisions based on FUD.
- 84% have acted on FOMO in relation to price surges — with 58% reporting FOMO influences them frequently and 26% occasionally.
- Missing out on significant price surges is the top factor for 60% of respondents, while only 17% expressed a greater fear of missing out on a price dip.
- 88% of crypto holders feel they have missed out on major gains, yet 84% remain optimistic about future opportunities.
Intro to FOMO or FUD 📖
When it comes to crypto, emotional decision-making can lead to costly mistakes. But the real question is: How much is the ever-changing sentiment towards crypto impacting your bottom line?
Crypto FOMO (fear of missing out) typically refers to the anxiety people feel when they believe they're being left behind on a potentially profitable investment opportunity.
On the other hand, FUD (fear, uncertainty and doubt) in crypto refers to negative emotions like panic, anxiety or hesitation that could lead to misinformed trading decisions. These feelings typically arise from misunderstandings or a lack of confidence in the future potential of a particular cryptocurrency.
Many traders also refer to these emotions as “greed” and “fear” respectively, and use a tool known as the Fear and Greed Index to inform the crypto trading strategy.
When left unchecked, FOMO and FUD can lead to trading decisions based on emotions, rather than facts surrounding the crypto market.
Heightened senses of FOMO and FUD could contribute to why 55% of respondents from our DCA Strategy Crypto Survey revealed they check crypto markets significantly more than traditional markets.
But, even the most seasoned traders can fall prey to emotional investing. Our latest report reveals that the majority of crypto holders have made an investment decision based on FUD (81%) or FOMO (84%) in the past.
Our survey of 1,248 crypto holders cuts through the noise around these slang terms to uncover the role of FOMO and FUD — while also exploring their influence on investors’ performance.
FOMO takes the reigns from 84% of crypto holders 🔍
While 81% of respondents admitted to making decisions based on FUD within the market, 84% have made investment choices due to FOMO. This could suggest that a large majority of investors are allowing emotional triggers to guide their trades rather than rational strategy.
Our findings also suggest that crypto holders are especially anxious about missing out on the chance to profit from the cryptocurrencies they already hold, rather than missing out on new opportunities.
In fact, when asked which outcome they fear missing out on more, the majority (60%) of respondents said they were most concerned with missing out on a significant price surge that would allow them to realize gains. This fear could also influence their trading behavior since 58% of responding crypto holders admitted they “frequently” make decisions based on this fear, while 26% reported this “occasionally” impacts their investment decisions.
Comparatively, only 17% of crypto holders ranked FOMO on “missing a significant price dip” (where they could invest more at a lower price). 20% most feared missing out on both a surge or dip equally. A mere 3% of the 1,248 surveyed crypto holders said they don’t let price movements influence their decision-making.
Our data also reveals a potential bias in the crypto market. Investors seem to prioritize chasing gains from price surges rather than taking advantage of opportunities to buy at lower prices.
This 'fear of missing out' on short-term profits could lead to impulsive buying during market highs rather than strategically accumulating assets, such as through dollar-cost averaging, when prices are lower.
In volatile markets, this behavior could result in investors missing out on potentially lucrative long-term opportunities, if the price of the asset were to increase.
Interestingly, 63% of crypto holders acknowledged that emotional decisions have had a significant negative impact on their overall crypto portfolio. This underscores the potential real-world consequences of making investment decisions based too heavily on market sentiment such as fear and greed, rather than carefully planned crypto trading strategies.
While market sentiment indicators can help inform decisions, a methodical approach to technical analysis using candlestick patterns and technical indicators could also provide valuable insights across a wider variety of market factors.
This could, in turn, help investors make more data-driven rather than emotional decisions regarding their crypto.
FOMO vs. future optimism: 84% of crypto holders still expect significant gains ✅
Despite the majority of crypto holders experiencing FOMO or FUD before, most still expressed optimism regarding the future outlook for the crypto economy.
In fact, our data shows that while 64% of responding crypto holders feel very strongly that they missed out on crypto's biggest gains, 68% of our respondents strongly agree that there are significant gains still to come from crypto.
This unique perspective is particularly evident among holders ages 45-60, with 78% of this age group feeling very strongly they missed the boat on early crypto gains. However, they are also the most optimistic about the future for crypto, as 75% very strongly believe there are significant gains yet to come.
Here’s how this breaks down across all surveyed age groups:
- 18-29-year-olds: 41% feel very strongly they’ve missed out on crypto’s biggest gains, while 36% feel very strongly there are significant gains still to come.
- 30-44-year-olds: 54% feel very strongly they’ve missed out, while 49% feel there are significant gains still to come.
- 45-60-year-olds: 78% feel very strongly they’ve missed out, while 74% remain optimistic about future gains.
- 60 years or older: 67% feel very strongly they’ve missed out, while 73% feel significant gains are still to come.
Gender also seems to play a role in these feelings of missed opportunity and optimism. Male-identifying crypto holders acknowledged that their emotions impact their investment decisions more frequently than reported by female-identifying holders.
Our data found that 83% of male respondents reported making investment decisions based on FUD, compared to 75% of female-identifying holders.
Notably, an even larger gap emerges regarding FOMO: 66% of men said they frequently made a crypto investment decision based on the fear of missing out on a price surge. In comparison, only 42% of female respondents reported the same.
Of these male crypto holders, 70% reported feeling very strongly that they’ve missed out on crypto’s biggest gains, compared to just 48% of female holders. This could suggest that while men may be more likely to react impulsively to market surges, they also experience greater regret when their strategies don’t pan out as expected.
This blend of regret and optimism across ages and genders could suggest that despite feeling late to the party, many crypto investors still see the potential for crypto to establish a long term presence in the market.
Navigating FOMO and FUD triggers 🧭
Our findings also highlight the relationship between the sources of investment information and emotional decision-making among crypto holders.
Many respondents reported relying on a mix of channels — including social media and influencers (61%), news outlets, blogs and podcasts (50%), sites like CoinMarketCap and CoinGecko (47%), and recommendations from friends and family (24%) — to identify new trading opportunities. The remaining 8% said they don't actively seek out new opportunities.
Interestingly, our survey found a correlation between the reliance on platforms like social media and higher feelings of FOMO. In fact, 85% of those who reported relying on social media as at least one source of investment information also said that emotional decisions have significantly and negatively impacted their portfolios.
While social media’s fast pace may contribute to FOMO, it also offers platforms for sharing valuable insights and strategies that can support informed decision-making. This is why it’s important to foster a critical approach to the information consumed from these sources so crypto holders can better navigate the market.
For some tips on how to best approach this, check out our article on how to Do your own research (DYOR).
Fighting FOMO and FUD with Kraken 🥊
While many crypto holders acknowledge that emotions like FOMO and FUD influence their trades, they also continue to express hope for future gains.
Understanding this dynamic is essential, as it may provide insights into how to mitigate the negative impact of emotional trading, particularly through more rational, data-driven strategies.
To help reduce the impact of emotional trading, savvy investors can turn to tools or strategies designed to keep their decisions grounded in logic. For instance, our recent survey of over 1,000 U.S. crypto users found that 59% of respondents use dollar-cost averaging (DCA) as their primary strategy for navigating crypto trades.
This strategy involves purchasing assets at regular intervals, regardless of market price, which can help smooth out the volatility and reduce the temptation to make impulsive trades during market dips or rallies.
Here are a few other tools to help crypto users take the FOMO and FUD out of their crypto trades:
- Recurring buys: Setting up automated purchases on a regular schedule is key to a more effective DCA strategy. It can help investors ride out market volatility that might otherwise trigger decisions driven by FOMO or FUD.
- Custom orders: Using this feature allows you to a specific price for your crypto purchases, sales, or conversions. This eliminates the need to constantly monitor price movements in the market and allows you to streamline your crypto trading strategies. Learn more about the different order types available to you on Kraken with our article What are trade orders?
- Chart pattern screeners: These tools help identify key patterns in market behavior, producing data-driven insights into potential price movements. By using chart pattern screeners, crypto users can focus their trades on technical analysis rather than knee-jerk reactions. If these charts are new to you, check out our article What are candlestick charts?
- AI trading bots: Crypto AI trading bots help take emotions out of investing by executing trades automatically based on vast amounts of market data. This can help crypto investors stick to a strategy without getting caught up in FOMO or FUD-driven decisions. However, as with any strategy, it’s important to understand the risks and rewards of AI trading bots.
There are several factors that contribute to a solid crypto investing strategy. For those just getting started, Kraken Learn is here to help!
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Kraken offers a robust platform with features designed to help clients better navigate these market fluctuations. Start your journey with Kraken and take the next step towards becoming a more confident crypto investor.
Methodology 🧑💻
This survey was conducted by SurveyMonkey Audience on behalf of Kraken on October 4, 2024. The results are based on 1,248 completed surveys. To qualify, respondents were screened to be U.S. crypto holders who are over 18 years of age. Data is unweighted, and the margin of error is approximately +/-3% for the overall sample with a 95% confidence level.
Disclaimer: These materials are for general information purposes only and are not investment advice or a recommendation or solicitation to buy, sell, stake, or hold any cryptoasset or to engage in any specific trading strategy. Kraken makes no representation or warranty of any kind, express or implied, as to the accuracy, completeness, timeliness, suitability or validity of any such information and will not be liable for any errors, omissions, or delays in this information or any losses, injuries, or damages arising from its display or use. Kraken does not and will not work to increase or decrease the price of any particular cryptoasset it makes available. Some crypto products and markets are unregulated, and you may not be protected by government compensation and/or regulatory protection schemes. The unpredictable nature of the cryptoasset markets can lead to loss of funds. Tax may be payable on any return and/or on any increase in the value of your cryptoassets and you should seek independent advice on your taxation position. Geographic restrictions may apply.