Kraken survey reveals crypto holders’ struggle with emotional trading decisions

A new survey by Kraken revealed that 63% of US crypto holders believe emotional decision-making has negatively impacted their portfolios, with fear of missing out (FOMO) and fear, uncertainty, and doubt (FUD) playing significant roles.

The survey, which gathered responses from 1,248 crypto investors, found that 84% had made decisions influenced by FOMO, and 81% acted on FUD.  Missing out on significant price surges emerged as the top emotional trigger for 60% of participants, compared to 17% who feared missing price dips.

The findings underline 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 anxiety of missing a profitable opportunity, frequently pushes investors to act impulsively, particularly during market highs. The survey revealed that 58% of crypto holders frequently 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 reactions to these emotions had caused them to miss long-term opportunities. In fact, 88% of investors said they felt they had missed out on major gains.

Age and gender differences play a role in emotional investing. Investors aged 45 to 60 were the most likely to feel they missed out on early gains (78%) but were also the most optimistic about the future, with 74% expressing confidence in significant returns ahead.

Gender disparities were also evident, as men reported more frequent decisions based on FOMO (66%) compared to women (42%). Male investors also expressed higher regret, with 70% believing they had missed out on major gains, versus 48% of female respondents.

Social media influence

Social media emerged as a major factor influencing trading behavior.

Among respondents who relied on platforms like Twitter or Instagram for market insights, 85% reported significant portfolio impacts from emotional trades. 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 found that 59% of respondents use dollar-cost averaging (DCA), a method involving regular investments regardless of price fluctuations.

Other tools gaining traction include automated recurring buys, custom orders to target specific prices, and AI trading bots to eliminate emotional bias. 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, particularly those aged 45 and up, displayed the highest levels of optimism, with many believing significant gains still lie ahead.

Mentioned in this article