For those investors who have taken a new step in the world of crypto, at that time many questions related to investment come in front of them, due to which they usually get nervous. There is even a term for this kind of situation: FOMO. However, according to research, FOMO is most prevalent in people aged 18 to 35 years. Looking at the cryptocurrency community, FOMO is a kind of term that has become popular, a market that is associated with irrational and unfounded trading decisions. If you are searching for a trading platform, make sure to find one that offers a free demo account so that you can practice trading before investing real money.
So, let’s learn through this blog what is the meaning of FOMO in crypto investment.
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What is FOMO in crypto investing?
FOMO occurs in the crypto world when a person considers exchanging or trading crypto resources a futile option. The majority of the time, opinions are drawn from information received without thoroughly checking its authenticity or source. FOMO in crypto forces people to buy assets at the highest prices or sell them at the lowest prices. However, the consequences of crypto FOMO can sometimes be more serious and even worse than the loss of invested capital—causing increased anxiety, estrangement from family, and many more harmful situations.
Identifying the Cause of FOMO
FOMO is being driven by several reasons in the crypto community, and identifying even a few of them can help stop any ill feeling before it sets in. Here are five reasons why, although by no means exhaustive, as a crypto trader or investor, this list might help you create a foundation for overcoming FOMO.
Avoid Major Losses
However, crypto FOMO is commonly seen as being one-sided: only profit-oriented which is where individuals consider making a big move to make a profit. But the opposite is true: investors can experience FOMO when they try to avoid big losses. , A prime example is the crash of TeraUSD (UST), a virtual stablecoin that lost nearly 70% of its value during the year 2022 from $1 to 30 cents.
Access To A Lot Of Information
In the world of cryptocurrency, information has emerged as an important driver, especially for profit. But at the same time, it can likewise be an instrument by which FOMO is dealt with. This is primarily seen while getting to a huge swath of information from multiple sources.
Catching the Next Big Move
Whenever you consider catching the following large move in the crypto local area, this thought normally appears to overwhelm at one moment, with the information on how much cash was made by a portion of the early financial backers in crypto like BTC and ETH. Might be inspired. For example, BTC has experienced a cumulative increase of up to 30,000% over the past nine years. However, the excitement of finding another such boom in the community has only fuelled more FOMO.
The early entrant wins everything.
However, this type of mindset usually stems from people who believe that early-mover gains always lead to positive results, as most success stories from early-stage investors have resulted in cryptocurrencies like BTC booming.
New, Untested Market
Unlike stock markets and forex, the crypto market is considered relatively untapped, largely because it is unregulated, and has encountered a low barrier to entry. Such factors have further fueled an influx of people with limited understanding and knowledge of how the market moves and participate out of curiosity, mainly seeing their strategy propelled by FOMO.
Wrapping up
Long before bitcoin was even invented, human beings have experienced various forms of FOMO. With crypto, this can prove to be quite damaging because of the possibility of losing an entire investment. With the help of discipline and following guidance, the investor can reduce the danger and impact of crypto FOMO