FOMO and FUD

FOMO, or fear of missing out, is the anxious urge to buy because prices are rising fast and everyone else seems to be making money. FUD, short for fear, uncertainty and doubt, describes negative news, rumours or arguments that spread worry and can trigger selling.

Both terms are used constantly in crypto communities. FOMO tends to peak near the top of rallies, when new investors pile in after seeing huge gains, and is a common reason people buy at the worst possible time. FUD can be legitimate criticism, such as reports of an exchange's insolvency, or deliberately spread to push prices down. Dismissing every concern as "FUD" is risky: some of the biggest crypto losses, from Terra to FTX, followed warnings that fans brushed off.

Practical defences include having a written plan, investing gradually through DCA, avoiding leverage, keeping position sizes small and checking claims against reliable sources before reacting.