Market
How FOMO and FUD Shape Crypto Investments
According to a new survey from Kraken, FOMO (fear of missing out) and FUD (fear, uncertainty, doubt) have been major drivers behind crypto purchasing decisions, impacting more than 80% of users. Nearly 88% of respondents believed they had missed out on major gains.
Nonetheless, the survey also determined that optimism for future gains is even stronger than regretting missed opportunities.
Kraken Sheds Light on FOMO and FUD In Crypto Investments
This survey described a staggering trend of emotional influence on the crypto market. Kraken, a long-standing centralized exchange, has a vested interest in quantifying this data: last month, it put 19 new tokens on its roadmap in response to post-election bullish sentiments.
While the crypto space has a long history of hype bubbles, Kraken described their influence in concrete terms:
“The majority of crypto holders have made an investment decision based on FUD (81%) or FOMO (84%) in the past. 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,” the survey claimed.
Kraken was particularly timely in conducting this study, as Bitcoin just passed $100,000 for the first time. The general bull market already boosted many cryptoassets, and forward momentum is still strong. The data has two meaningful conclusions on this subject: emotional appeals have a strong impact, and market optimism is demonstrably high.
The research also revealed demographic information with particularly relevant conclusions. With only slight exceptions, each older cohort is more confident that it lost crypto’s biggest gains and that further gains are still coming. Most 18 to 29-year-olds think that they’ve missed out on notable gains, but the majority of the users above age 60 are still bullish.
Additionally, the survey documented a gender gap in these trends as well. For example, there is a 24% gap between men and women who “made a crypto investment decision based on the fear of missing out on a price surge.”
Men appear to be much more susceptible to FOMO. These patterns repeat over several similar questions. The report did not mention nonbinary respondents.
Overall, Kraken concluded by identifying some of the biggest FUD and FOMO sources and giving advice on rational investment decisions. Social media can be a valuable source of market information, but it’s also the biggest source of these emotional pressures. The firm recommends maintaining a critical approach to better navigate the market.
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