Disclaimer: The information provided in this article is for educational purposes only and should not be considered as financial advice.
The world of cryptocurrency is a thrilling and sometimes overwhelming place. Because it has the potential for some pretty serious gains, it’s no surprise that people often find themselves suffering from FOMO. You may be familiar with the concept of FOMO in terms of hanging out with friends or getting a few drinks at a bar or missing out (this is a clue right here) on something you wish you were experiencing.
But what does FOMO mean in crypto?
What is FOMO in Terms of Crypto?
Before we get into the nitty-gritty of dealing with crypto FOMO, we need to first look at what it means. FOMO stands for “Fear of Missing Out.” In the context of cryptocurrency, it refers to the anxiety and “fear” that you might miss out on a lucrative opportunity or investment.
It’s that feeling you get when you see Bitcoin, Ethereum, or another cryptocurrency skyrocketing in value, and you start to question whether you should invest and take the chance before it dissipates, even if you previously had no interest in crypto.
Crypto FOMO can be dangerous because it’s the perfect time to make terrible investment decisions. But hey, there is also a chance that you get lucky and double your crypto assets – this is the possibility and trigger of FOMO in crypto.
FOMO explained – Why Do You Get It?
Many factors contribute to FOMO, from media hype, social pressure, fear of regret, and lack of understanding, to market volatility. Media coverage and success stories during bull markets are huge triggers for FOMO.
Peer influence, such as that from family and friends to get into the cryptocurrency space, and the fear of missing out on gains drive your participation. Regret of not investing during a bull run also fuels FOMO. However, keep in mind that inadequate knowledge about crypto and the market’s volatility can contribute to impulsive actions – which many times don’t end in your favor.
FOMO and FUD are Ultimate Scammer Tools
Crypto FOMO doesn’t just affect individual investors, it’s also a favorite tool of scammers in the crypto space. FOMO often goes hand in hand with its evil twin, FUD, which stands for “Fear, Uncertainty, Doubt”. The latter is what people, the media, the market, and even yourself can instill in your mind. The seed is sowed and slowly, it takes root and blooms into full-fledged FOMO.
Scammers love to take advantage of this and spread FUD to create panic and drive prices down, and then, they capitalize on the ensuing FOMO by selling at inflated prices. Don’t let them win!
To protect yourself from these tactics, it’s important to not only conduct thorough research but to also verify information from multiple sources, and be cautious about making impulsive decisions based on hype or fear.
Avoiding Crypto FOMO
Now that we understand what it is and why it happens, there has to be a way to avoid FOMO, right? Owning crypto is a good way to diversify your portfolio but they can be considered risky assets. Many investors may forget these facts along the way but it’s important to remember that your investment in crypto is similar to certain stock markets – there are ebbs and flows, highs and lows.
Below are some tips to help you avoid FOMO and to make sound investments.
You’re in It for the Long Haul
One of the most effective ways to counter FOMO is to adopt a long-term perspective. Remember that you’re in it for the long haul. Understand that cryptocurrencies are a highly volatile asset class, and short-term price fluctuations are common if not inevitable.
Instead of trying to time the market for quick and high gains, focus on the long-term potential of blockchain technology and the specific projects you believe in. This mindset shift can help you resist the urge to chase fleeting investments that don’t have the returns you’re looking for.
It’s about Goals Not Just Money
Believe and have faith in the technology and the project. Before investing in crypto, define clear investment goals. Ask yourself why you’re investing, what you believe in, and what you hope to achieve. Are you looking for long-term wealth preservation and growth, a retirement fund, or maybe just speculative crypto trading?
When you have well-defined goals, it becomes easier to resist FOMO and the impulsive decisions that they propel.
Know You Can’t Always Win
Everyone in the crypto community must realize that investments aren’t always going to see gains, especially a digital asset that is still volatile and largely unregulated like crypto. Accept that in the world of cryptocurrency, you won’t always win.
Losses are part of the game, and it’s crucial to be mentally prepared for them. Don’t invest more than you can afford to lose, and always have a risk management strategy in place. Knowing that not every trade will be a win can help you look at crypto investments with a more balanced mindset and in a more unbiased, neutral way.
Watch the Market and Learn
Stay informed about the crypto market by following news and trends, but don’t believe everything you see or read. Always do your own research and verify. Be cautious of sensational headlines that are meant to elicit a reaction.
Understand the projects that you choose to invest in, the technology behind them, and their potential for real-world adoption and benefits. Knowledge is a powerful tool against FOMO, because it allows you to make informed decisions based on facts rather than emotions.
Crypto FOMO is common, so don’t feel bad if it hits you. Remember that it’s driven by a fear of missing out on potentially lucrative opportunities, but it can lead to impulsive and often irrational decisions.
You can deal with crypto FOMO effectively by understanding its causes, adopting a long-term mindset, setting clear investment goals, being prepared for losses, and staying informed through research, verification and learning.