These kinds of queries make many investors quite nervous. So much so that a phrase for it even exists: FOMO (fear of missing out). According to research, FOMO is more common among adults between the ages of 18 and 35.
The word “FOMO” is well-known in the cryptocurrency industry, a sector where impulsive and even unfounded trading actions have come to be connected.
What Does FOMO Mean for Bitcoin Investing?
When a person decides irrationally to trade or invest in a crypto asset based on some piece of information they have received without adequately checking its source and/or authenticity, this is known as FOMO in the crypto market.
In the case of cryptocurrencies, FOMO causes consumers to purchase assets at their greatest prices or even to sell them at their lowest, as opposed to the more prudent course of action. Crypto FOMO can occasionally have negative effects that are harsher and more pervasive than a loss of invested money; these effects can include familial estrangement, anxiety, and despair.
Risks to One’s Health from FOMO
A person’s mental state may be impacted when they lose trading cash in a poor investment, especially if it is a sizable sum.
This failure can then be seen in other areas of their life, including relationships, ties to family and friends, and other things. If extra care isn’t done, the person begins to experience social deterioration and eventually develops disorder.
The fourth study director, Robert Waldinger, stated in an 80-year study of male Harvard students on what constitutes a healthy life, “The startling result is that our relationships and how happy we are in our relationships has a major effect on our health.”
Investments in cryptocurrencies can be made using Waldinger’s justification. Crypto FOMO may have an impact on people’s health and quality of life in addition to their investment portfolios.
Illustrations of FOMO in Crypto
The erratic swings of Dogecoin in 2021 are a well-known illustration of crypto FOMO. People who did not hold Dogecoin at the time of Elon Musk, the CEO of Tesla, tweeting about it had FOMO.
Several times, the price of the meme cryptocurrency has risen or fallen based on how the market interprets Musk’s remarks. In the 24 hours following Musk’s appearance on “Saturday Night Live” in May 2021, Dogecoin fell by around 30%. Musk had previously referred to Dogecoin as a “hustle” on the program.
The influence of FOMO in the cryptocurrency ecosystem has encouraged investment in a number of shitcoins. The urge to capitalize as soon as possible on the next Bitcoin-like money-making successor is what mostly fuels crypto FOMO. In actuality, making a potentially beneficial market move comes from deliberating logically and thoroughly before deciding to buy in any coin.
Finding the Root of FOMO
Understanding some of them may assist prevent FOMO when it next manifests. FOMO is being fuelled by a number of factors in the bitcoin ecosystem. The list of the top five causes is not all-inclusive, but it may serve as a starting point for investors and traders in the cryptocurrency market to overcome FOMO.
Detecting the Upcoming Big Move
Because of awareness of how much money some early investors in cryptocurrencies like Bitcoin and Ethereum gained, the concept of catching the next big move has typically dominated the crypto community. For instance, during the previous nine years, the value of Bitcoin has increased by a total of around 30,000%.
The community has developed FOMO due to the enthusiasm to find another similar spike.
The Bottom Line
Long before cryptocurrencies were created, human beings experienced various forms of FOMO. Due to the possibility of losing the entire investment, it might be harmful when dealing with cryptocurrencies. Investors who exercise discipline while following advice can avoid the risks and negative effects of bitcoin FOMO.