FOMO — The strongest emotion in crypto investing
FOMO, or “fear of missing out,” was once used to describe the feeling you get when you see a picture of your friend on social media out partying on a Saturday night. Now, FOMO has dominated the mindset of crypto investors all over the world. Why do we get FOMO?
I can summarize the root cause of FOMO in one word: access.
Never has it been this easy to buy and sell a security (I know, jury’s still out on this definition). In a matter of minutes or hours, you can double your crypto investment like XRP did in the last few days. The barrier to buying cryptos is so low that anyone with an Internet connection can conceivably purchase coins.
Think about buying your favorite stock or fund on some big brokerage like Etrade or Fidelity. You buy the stock on hearing some good news in the market. For the average investor, the barrier to buy is high because sometimes your order doesn’t get filled until the following day (not to count the fees for the average retail investor).
Once you buy the stock, do you have any impact on the actual price? In crypto markets, most people are buying based on social media/word-of-mouth and maybe doing some research here and there. You, as a crypto owner, can have a direct impact on the price by sharing your newfound coin purchase on social media and influence your peers to get into the market.
“Envy is the art of counting the other fellow’s blessings, instead of our own.”
As you see Bitcoin cross $20,000 and Ethereum get close to $1,000 and you have not invested yet, how do you deal with the FOMO?
The only advice I can provide is this:
If you have a ton of time on your hands to monitor every single ICO and token and feel like you can jump on the rocket ship before it hits the moon, by all means go in. For us regular people with regular jobs, I’d recommend doing your research and read the whitepaper and evaluate the coin as if it were a startup. If you believe in the business model and long-term vision, investing will be the fastest way to get rid of the FOMO.
In 2018, I believe more rigor will be put towards folks in the latter camp who are willing to do the research and not buy into the marketing/social media hype of some of these ICOs.
Currency Crate is a monthly cryptocurrency subscription service that sends handpicked cryptocurrencies straight to your digital wallet. Join our mailing list at CurrencyCrate.com — we’re launching soon.
