After a long crypto winter of 18 months, the tables have finally turned. However, while Bitcoin is back in the game, a new problem has arrived, ‘Crypto FOMO’. Lost long in the 2022 hurdles, the term is creating quite a buzz in the crypto industry lately.
Yesterday, the United States SEC issued a warning of crypto FOMO among investors. They shared the risks associated with meme stocks, digital assets, cryptocurrencies, and NFTs. It’s been 3 years since it first made a post about FOMO in January 2021 when the bull market saw Bitcoin, Ethereum, and other large coins reaching their highs.
But, what is crypto FOMO? How to detect it, and most importantly, how to avoid it? Did you know that you may indirectly fall prey to crypto FOMO? Let’s first understand what crypto FOMO is and why is it a popular buzzword in the industry.
What is Crypto FOMO?
2024 took a drastic turn for crypto investors. The good times are back for crypto enthusiasts. Now that the assets are soaring in price, how can investors avoid crypto FOMO?
So, what is crypto FOMO anyway?
FOMO is an acronym for ‘Fear of Missing Out’. It’s a term used to describe anxiety when others have a good time. In the case of crypto FOMO, a similar feeling was observed among investors in 2020, and 2021. Social media posts by influencers and celebrities trigger the anxiety of FOMO among investors.
Let me explain, how FOMO works.
The human brain is connected to social experiences. In a good way, FOMO is a good feeling that encourages people to make new friends and encourage themselves to enjoy new beginnings.
Sadly, FOMO can come up at any moment or situation, both positive and negative. One such negative aspect is investment. Over short intervals, fear and greed are the two human emotions that dominate the market.
The feeling of FOMO often leads people to follow others to make a quick fortune. This especially occurs when the crowd opts for a popular cryptocurrency like Bitcoin. However, the difference is that they do not fully understand the risks associated with it.
Why is Crypto FOMO Dangerous?
Fads are a common occurrence in the crypto industry. Any asset with a soaring price at one moment, can quickly fall. That’s how volatile the crypto industry is. Coming back to FOMO, it can quickly turn into fun to fear losing well-earned money.
The turbulence in the market of 2022 has made it clear that many once-popular crypto investments have lost the support of their early adopters. As a result, those who came into the game late are now bearing the brunt of the losses as prices continue to plummet.
Greed and fear move the crypto, stocks, and other markets. Here’s an advice from one investor to another, ‘Investing requires patience to take the long view.’
How to Avoid Crypto FOMO?
Let’s discuss the four exercises that can help you avoid crypto FOMO, and make sound investment choices.
- Investing is about reviewing the long shot.
- Make long-term goals, don’t aim to simply make money.
- Don’t go after ‘hot tips’ that worked for your friends, rather build your portfolio.
- Every Instagram reel you see has an agenda, and not all match your best interests.
If you feel, you are a victim of FOMO, keep yourself away from social media. Sit and do extensive research on your portfolio. If you are planning to invest in a high-risk asset, think of the source. Always invest in an asset that you can afford to lose in case of any aversions.
Also Read- Popular Blockchain Technology Trends in 2024
Where to Invest Your Hard-Earned Money?
Next time you plan to invest, check for any asset that you have an extensive understanding of and not a YouTube-recommended asset that promises an unrealistic high return on investment. Instead of listening to friends, or celebrities promoting meme coins, research on predictions, follow market trends, and most of all, fight crypto FOMO. Therefore, next time before dropping some hard-earned coins, make sure you mentally analyze your sole purpose of investment. After all, ‘money-saved is money-earned.’
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