Did you ever feel that stabbing sensation while scrolling through social media and reading everyone’s latest crypto windfall? Can you remember how Dogecoin became a viral sensation? Now, picture, if you will, Elon Musk posting a picture of his dog with a Doge reference. All of a sudden, the price of Dogecoin went crazy; it created an atmosphere of exciting possibilities simply because it had a celebrity endorsement. It’s obvious that many people without long-term sustainability will feel the urge to get some Doge before it goes to the moon. FOMO will make you act upon impulse, and you’ll get an unstable pattern of trading; it really can be a danger for a cryptocurrency investor.
Key Takeaways
- FOMO is a product of an irrational decision to invest by considering only a portion of data without verifying its accuracy.
- FOMO causes novices to buy at record prices only to sell after prices have hit record lows.
- FOMO doesn’t just have a price point; it can actually result in deep-seated psychological trauma.
What is FOMO Exactly?
FOMO stands for “fear of missing out.” We get it in the crypto space when we feel like we’re about to miss out, so we go in and try to avoid getting rekt badly on the next rocket ride. It’s that feeling that if you don’t jump on the latest hot coin, you’re going to be left out.
The promise of astronomical returns is heady, with a new project coming up literally every day. The social media factor really does brew an intoxicating mix. Feeds controlled by algorithms are filled to the brim with the purported success stories of people making a killing on crypto.
FOMO Basically Occurs During:
- Normal Price Spike: In the market where everything is volatile, if a coin’s price pumps all of a sudden and very fast, then people get panicked and feel the pressure to buy the same immediately before the price goes high without doing proper research about it.
- Social Media Hype: Scrolling through your news feed, seeing truckloads of tweets about the next big thing, with every person on the face of the Earth discussing how to get rich, you will start to think that maybe you have missed your ship if you do not act ASAP.
FOMO creates an emotional response, not one driven by clear and rational thoughts. That is what causes people to chase after prices that are already up, just to see them drop a few days later. Ignoring all risks and getting into the hype in the name of an early mover advantage without understanding a project’s technology or long-term potential.
How Do Crypto Traders Avoid FOMO?
These proven strategies will help you avoid the FOMO trap and make savvy investment decisions:
- Do Not Be Scared of FOMO: You cannot make money on every trade/investment. You’ve got to remember down deep that it’s better to miss out on a potential profit than it is to lose money in a bad investment. Realize and understand that there will always be another opportunity worth waiting for; time is prudent to do thorough research and proper risk management before making any investment.
- Do Your Own Research: Develop a disciplined approach to acquiring news on running projects. It would be best if you took some time to understand the technology behind it and verify the past records of the team and potential for real-world use cases before you invest in any project. DYOR! Don’t be a sheep.
- Know Your Risk Tolerance: How much capital can one comfortably invest at the risk of losing? Well, one shouldn’t invest everything when they can’t lose it all. Clearly have investment planning in regard to your risk tolerance and ways to implement the same. It keeps you in check and tailors your decisions toward objectivity rather than emotions.
- Shut Out Social Media Noise: Social media is the breeding ground for the major FOMO. If at any point you have realized there are constant pressures based on social media hype, it could be time to reduce your exposure. Look for a reliable source of information and keep updated. Check and recheck a project before hopping on it. Don’t be carried along with the supposed get-rich-quick schemes on your timeline but be patient enough to seek out the real ones and go with them.
Crypto luck is a product of discipline and experience. You should not allow FOMO to take the better of you. Just find satisfaction in your investments. Just focus on steady growth and development rather than the craze for quick money.
