FOMO is slang used in trading and in normal day-to-day expression. It is an abbreviation for ‘Fear out of missing out.
It is a phenomenon that often leads to feelings of unease, dissatisfaction, depression, and stress. It is one of the disadvantages of social media which has become part of our lives today.
FOMO is being experienced by financial market traders which include crypto and forex traders. It is one of the popular abbreviations you need to know if you’ll be trading the financial market.
In this post, we’ll discuss FOMO in the world of cryptocurrency. We’ll see the causes, effects, and benefits to crypto traders. Before then, let’s understand the term ‘fear of missing out.
What is FOMO?
The Cambridge English dictionary defines FOMO as a worrying feeling that you may miss exciting events that other people are going to.
Social media is one of the leading causes of FOMO. Many have been affected by the affluent or fake lifestyle of others which has influenced their decision-making. It is attributed to feelings of unease, dissatisfaction, depression, and stress.
What is FOMO in Cryptocurrency?
FOMO refers to the sense of urgency to buy Bitcoin or altcoins when everyone else is talking about it.
The fear of missing out is one of the reasons many take decisions when going into crypto. Many have got to know about crypto when everyone is talking about it. Some projects have been a subject of hype and have got many to invest in them.
The fear of missing out has been widely attributed to the rapid rise and fall of Bitcoin’s price in 2017. Many who want to earn a fortune like the early bitcoin investors were involved here.
FOMO can cause people to act impulsively. If you are afraid of missing out on an opportunity, there is a good chance you will be more likely to make risky decisions. This is because the fear of missing out overrides your judgment. This has serious implications in crypto markets, especially when it comes to pump and dump.
People can make an impulsive decision with the fear of missing out, especially with the price volatility of crypto. It can make people buy quickly and sell quickly.
For the past couple of months, the price of crypto assets has been down until recently. This has made some traders, investors, and miners make impulsive decisions out of fear.
Fear of missing out can also lead to distrust in cryptocurrency markets. This has made people feel that the markets are rigged or that whales are manipulating prices for their own benefit. As a result of FOMO, many newcomers to crypto markets don’t do the proper research and fall prey to exit scams.
What are the Benefits of FOMO in Cryptocurrency?
The fear of missing out has some benefits for crypto traders, investors, and the industry at large. One thing that is very visible is the mass adoption and growing popularity of cryptocurrency.
Today, the crypto market is worth trillions of US dollars, this shows that many have put their money in crypto. Despite the recent meltdown, many crypto projects are being launched.
Since people are afraid they will miss out on great opportunities, this leads them to look for ways to enter the market through exchanges or other means. Furthermore, once people are in the market, they are likely to stay put even when the price drops since they do not want to miss out on gains.
It is also beneficial for people to become educated on blockchain technology and look for ways to enter these new markets.
How to stay out of the fear of missing out
Crypto beginners and veteran traders/investors must learn to pay attention to other market signals before making a decision.
FOMO should never be your only reason for making a trade. Traders should study what they are investing in before putting their hard-earned money.
If you’ve decided to trade crypto assets, you must watch out for hypes in the market. Crypto markets are largely unregulated and carry great risk, so it is important to educate yourself and take all factors into consideration before trading.
Fear of missing out is a popular term in trading that happens when people are afraid of missing out on opportunities for fear of failing or making the wrong decision. It has made some lose their hard-earned money while leading to mass adoption & popularity of crypto.
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