The Cambridge English dictionary defines FOMO, which is the abbreviation for ‘Fear of Missing Out as a worrying feeling that you may miss exciting events that other people are going to.
FOMO often leads to feelings of unease, dissatisfaction, depression, and stress. It is one of the disadvantages of social media which has become part of our lives today.
In the crypto world, FOMO is one of the several slangs you need to know as a beginner. You’ll definitely come across this abbreviation as well as FUD, HODL, and so on.
In this post, we’ll learn about the fear of missing out on crypto. For the sake of beginners, let’s dive into the world of cryptocurrency and blockchain technology.
What is Cryptocurrency?
Cryptocurrency is a digitally encrypted, decentralized currency that is not linked to or regulated by any government or central bank.
It is based on blockchain technology, which is a distributed ledger framework. Bitcoin is the first cryptocurrency created which has led to the creation of others alike known as altcoins.
Cryptos are categorized as virtual or digital currencies. They were originally developed to provide an alternative mode of payment for online transactions.
However, cryptocurrencies have not yet been generally adopted or legalized by many nations. They are actually too unreliable to be used as payment methods.
What is a Blockchain?
Blockchain is a distributed ledger that is managed by a network of computers. It maintains an exact copy of the database and updates its records by consensus based on pure mathematics.
Blockchain stores data in blocks that are then linked together via cryptography. It can be used to store different types of information but the most common use so far has been as a ledger for transactions.
Blockchains and cryptocurrency are part of the most used words in our world today. Although it is known for its role in the cryptocurrency system, it has several other functions.
What is FOMO in Cryptocurrency?
Fear of missing out (FOMO) refers to the sense of urgency to buy Bitcoin or altcoins when everyone else is talking about it.
Bitcoin and several other crypto assets have grown in recent years with awareness. In fact, many have been involved in crypto trading/investment when they hear about the opportunities. Many crypto projects have been hyped for people to invest in it. FOMO is, however, one of the reasons many take decisions when going into crypto.
The fear of missing out has been widely attributed to the rapid rise and fall of Bitcoin’s price in 2017. Many who want to earn a fortune like the early bitcoin investors were involved here.
FOMO can cause people to act impulsively. If you are afraid of missing out on an opportunity, there is a good chance you will be more likely to make risky decisions. This is because the fear of missing out overrides your judgment. This has serious implications in crypto markets, especially when it comes to pump and dump.
People can make an impulsive decision with the fear of missing out, especially with the price volatility of crypto. It can make people buy quickly and sell quickly.
For the past couple of months, the price of Bitcoin has been down until recently. This has made some traders, investors, and miners make impulsive decisions out of fear. Some make it a point of duty to sell their bitcoins, and other crypto assets as a result of this.
Fear of missing out can also lead to distrust in cryptocurrency markets. This has made people feel that the markets are rigged or that whales are manipulating prices for their own benefit. As a result of FOMO, many newcomers to crypto markets don’t do the proper research and fall prey to exit scams.
What are the Benefits of FOMO in Cryptocurrency?
The fear of missing out has some benefits for crypto traders, investors, and the industry at large. One thing that is very visible is the mass adoption and growing popularity of cryptocurrency.
Today, the crypto market is worth trillions of US dollars, this shows that many have put their money in crypto. Despite the recent meltdown, many crypto projects are being launched.
Since people are afraid they will miss out on great opportunities, this leads them to look for ways to enter the market through exchanges or other means. Furthermore, once people are in the market, they are likely to stay put even when the price drops since they do not want to miss out on gains.
It is also beneficial for people to become educated on blockchain technology and look for ways to enter these new markets.
What Traders Should Have in Mind About FOMO
1. Crypto beginners and veteran traders/investors must learn to pay attention to other market signals before making a decision.
2. FOMO should never be your only reason for making a trade
3. Study the crypto assets to invest in and the platforms to invest in them. Many crypto assets that have been hyped have made many lose their hard-earned more as a result of scams.
4. Crypto markets are largely unregulated and carry great risk, so it is important to educate yourself and take all factors into consideration before trading.
The Bottom Line
The fear of missing out happens when people are afraid of missing out on opportunities for fear of failing or making the wrong decision. It is widely attributed to the rapid rise and fall of Bitcoin’s price in 2017.
However, there are benefits of FOMO in cryptocurrency as it leads to mass adoption of crypto as well as its growing popularity.