Emotional decision-making is steering many crypto investors into costly mistakes as the market hits new highs. A survey from Kraken shows how FOMO (fear of missing out) and FUD (fear, uncertainty, and doubt) often cloud judgment and drive erratic trading decisions.
The survey results show that 84% of crypto holders make decisions based on FOMO, while 81% have admitted they let FUD guide them into making trades. Heading into 2023, 60% of respondents said one of their biggest concerns is the fear of missing out on a price surge, many generally making impulsive decisions predicated on that fear.
In that case, 58% of the holders reported making decisions based on FOMO frequently, against 26% of holders who do it at random. Interestingly, 63% of these then realized that emotional decisions had actually hurt their portfolios; it underlined how the risks of being taken over by mere emotions and dictating trades stood.
This notwithstanding, a total of 68% are optimistic about the future prospects of these virtual assets. Even though lots of investors, in essence, felt like they had actually missed the boat on those major surges.
This survey also follows how emotional decision-making has its gender gap. Male holders are more impulsive at feeling FOMO and investing, with 66% admitting that against a 42% women counter. Men also report high levels of regret at the inability to catch key gains.
the influence of social media on crypto investment choices
Meanwhile, age plays its role, too: it has been found that older crypto holders, especially those who are in the age bracket of 45-60 years. They were most likely to think they’d missed out on the gains earlier on. But still, remain optimistic about making profits in the future.
The data points at social media influence, where 61% of respondents depend on social media for trading insights. Those investors who would seek idea generation on social platforms easily fall into FOMO, thus making the critical approach to info much more important for investors.
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