What is Fear of Missing Out (FOMO)?
FOMO is short for fear of missing out. It means the feeling of anxiety brought by the idea of other people sharing a positive or unique experience without you, and in the context of crypto, refers to people being afraid of missing out on profits.
FOMO especially happens when crypto investors see a bull rally in a coin or token. It arises because they have not yet bought it. The FOMO sensation is especially prevalent when a cryptocurrency increases in value considerably over a reasonably brief time.
The FOMO sensation might drive specific investors or the marketplace participants to create financial investment choices based on feelings instead of reasoning and thinking. It can lead to a giant bubble in the possession, incurring more significant risk of monetary losses.
FOMO can also be an advertising approach to trigger the investors’ fear of missing out to lure investors into acting.
Exactly how to overcome FOMO? Doing away with FOMO is tough. To handle it, do your research on the cryptocurrencies before making financial investment choices. Also, produce a collection of policies for trading, or establish limitations on the allowable losses and profits.
What are the Consequences of FOMO?
FOMO often translates to unreasonable and rushed decisions in crypto trading. What it means is that people will buy and sell hurriedly.
Hence, FOMO is often associated with adverse effects. When FOMO is generated among people, investors can feel the impact on cryptocurrency prices intensely.
What are the Key Pros & Cons of FOMO?
FOMO is not just damaging; some positive aspects can be derived.
- A good guideline for traders.
- Favourable buying and selling opportunities.
- Encouragement for investment in new coins.
- It leads to a total loss.
- It leads to unreasonable trading.