If you’ve been involved in the cryptocurrency world recently, you’ve probably heard the terms FOMO and FUD thrown around. These two emotional triggers have a huge impact on the way people invest in crypto, and understanding them can help you make better, more informed decisions.

In this article, I’ll explain FOMO (Fear of Missing Out) and FUD (Fear, Uncertainty, and Doubt), using simple examples and numbers that anyone can understand.

What is FOMO (Fear of Missing Out)?

FOMO stands for Fear of Missing Out. This feeling arises when you see other people making money or getting excited about a rapidly rising market. You feel like you might miss an opportunity if you don’t act fast. In the crypto world, FOMO usually happens when a cryptocurrency's price is shooting up quickly, and everyone starts buying, hoping to get in before the price climbs even higher.

Example of FOMO:

Let’s say Bitcoin (BTC) is sitting at $97,000.

• You see headlines that big financial institutions are now adopting Bitcoin or that governments are making regulations more favorable for crypto.

• Bitcoin jumps from $97,000 to $105,000 in just a few days, and people start getting excited.

Now, you're thinking: “I need to buy Bitcoin before it goes any higher!”

• Day 1: Bitcoin is at $97,000.

• Day 3: It rises to $105,000.

• Day 7: Bitcoin hits $110,000.

Seeing the price keep climbing, you panic and think, “I can’t miss this! I’m going to buy now before it gets any higher.” You end up buying Bitcoin at $110,000, even though it’s much higher than it was just a few days ago.

But then, right after you buy, the market experiences a correction. Bitcoin drops back down to $98,000. You’ve just bought at the peak, and now you're at risk of losing money.

This is a classic case of FOMO. You let excitement and fear of missing out drive your decision, instead of sticking to a plan or waiting for the right moment.

What is FUD (Fear, Uncertainty, and Doubt)?

On the flip side, FUD stands for Fear, Uncertainty, and Doubt. It’s that feeling of panic or uncertainty you experience when negative news hits the market. In crypto, this often happens when something bad happens (like a government crackdown or an exchange hack), and people start to sell their assets in fear that prices will drop even further.

Example of FUD:

Imagine Bitcoin is currently priced at $97,000.

• Suddenly, there’s news that a major government is planning to ban Bitcoin or that a prominent exchange has been hacked, and people’s funds are at risk.

• The price of Bitcoin starts to fall rapidly.

Here’s how it could play out:

• Day 1: Bitcoin is at $97,000.

• Day 3: News breaks about the government’s ban, and the price drops to $85,000.


• Day 7: Bitcoin has fallen even further to $78,000 as more people sell out of fear.

Now, you’re thinking, “If I don’t sell now, I could lose everything!” You panic and sell your Bitcoin at $78,000, fearing that it will crash to nothing.

But here’s the kicker: Once the news cycle calms down and the panic fades, the price of Bitcoin may start to recover. It could bounce back to $85,000, or even $90,000, within a few weeks. If you’d held on, you might have avoided a loss or even made a profit when the market rebounded.

This is a prime example of FUD. You let negative news and fear drive you to make a quick decision, without taking time to understand the full picture.

How FOMO and FUD Affect Your Decisions

Both FOMO and FUD can cloud your judgment and lead to poor decisions. Here's how they work:

• FOMO can cause you to buy at the peak, just because you’re afraid of missing out on potential gains. But when the market corrects, you could be left holding an asset that’s lost value.

• FUD can cause you to sell in a panic, locking in losses during a dip. Often, prices bounce back after a correction or bad news, and you miss out on the recovery.

When you make decisions based on emotions, it’s easy to let fear and excitement push you in the wrong direction. That’s why it’s important to keep your emotions in check and focus on the bigger picture.

How to Avoid FOMO and FUD

So, how can you avoid falling into these emotional traps and making bad decisions? Here are some tips to help you manage FOMO and FUD:

1. Stick to Your Plan

The best way to avoid FOMO is to have a clear plan. Decide in advance how much you want to invest, at what price, and what your exit strategy will be. Don’t let the fear of missing out push you to make rash decisions.

2. Don’t Follow the Herd

Just because everyone is excited about Bitcoin hitting $100,000 doesn’t mean it’s the right time to buy. Make sure you understand the market and why you’re investing, rather than just jumping in because everyone else is.

3. Take a Long-Term View

Cryptocurrency markets are volatile, and prices can swing wildly. If you’re in it for the long-term, don’t let short-term price drops or spikes affect your strategy. If you believe in the long-term value of Bitcoin, don’t let the daily fluctuations throw you off course.

4. Diversify Your Investments

One way to protect yourself from FOMO and FUD is to spread your investments across multiple assets. This reduces the impact of any single investment's ups and downs and makes you less likely to panic-sell or buy in at the wrong time.

5. Stay Calm and Do Your Own Research

Whenever you feel yourself getting anxious, take a deep breath and step back. Make sure you’re making decisions based on facts, not emotions. Read up on the news, understand what’s really happening, and don’t let rumors or panic-mongering influence your choices.

Final Thoughts

FOMO and FUD are powerful emotional forces that can cause you to make impulsive decisions in the crypto market. Understanding these triggers and how they work can help you stay calm and make more rational choices, whether you're buying, selling, or holding your assets.


Investing in cryptocurrency isn’t about chasing every price swing or reacting to every piece of news. It’s about having a strategy, staying patient, and not letting fear or excitement drive your decisions. By keeping a level head, you can avoid costly mistakes and make smarter decisions in the long run.


Remember: investing is a journey, not a race. Stick to your plan, stay informed, and always think before you act.