FOMO is everywhere. It makes most people make decisions and act in certain ways that they usually wouldn’t consider. This social phenomenon has been around for decades, and it’s still affecting us in many parts of our lives.
The crypto market was heavily hit by FOMO, which has made many people lose their investments. It’s no surprise that many investors are against FOMO and are actively advising beginners to fight it.
What role does FOMO play in the crypto industry? Let’s find out!
What’s FOMO?
FOMO is an acronym for “Fear of Missing Out.” It refers to the feeling that other people are living better lives than you because of something they did.
In other words, you feel like you’re “missing out” on something that most other people are doing.
Social media has played a huge role in making FOMO more common. Many experts have studied the psychological effects of this phenomenon to come up with a way to fight it, such as the FOMO-R method.
FOMO is something that can cause a lot of stress, anxiety, and even depression in people. When it comes to the financial market, this is also something that could make you lose money.
How Does FOMO Affect the Crypto Market?
The crypto community is familiar with the FOMO term, but why? Essentially, FOMO encourages people to make irrational investing decisions while trading.
A great example of FOMO revolves around Elon Musk and his Dogecoin promotions. Back in 2021, Elon Musk started making subtle tweets about Dogecoin, which was considered a “meme coin” at the time.
That’s all it took to make hundreds of thousands of people invest in this cryptocurrency, making its value skyrocket. If Elon Musk is doing it, why shouldn’t you?
The problem is that these situations make people trade without doing research first. An example of this is Glauber Contessoto’s story. He put his life savings into Dogecoin back in February 2021. It was about $188,000.
Glauber got about $3 million from his investment, but instead of reinvesting his profits, he decided to keep them. His $3 million went down to about $230,000 in 2022.
He claimed that he made his first-ever crypto investment in February 2021, so he barely had any knowledge about what the best move in that situation was.
FOMO could make you do something that benefits you in the future, but if you don’t do research and educate yourself, you’re more likely to lose later. That’s why many investors use the BitAI Method to increase the ROI of their trading campaigns.
What Can You Do to Fight FOMO?
Unfortunately, it’s not easy to fight FOMO. What you can do is “control” your urge to follow the masses and research people’s claims before deciding anything.
There are several ways to avoid FOMO as a crypto trader, including:
Create a Plan
It seems obvious, but having an investment plan and sticking to it allows you to avoid any emotional trading. FOMO is known for stressing out people, and such a strong emotion is hard to avoid.
However, if you have a plan, you won’t act on those emotions, helping you keep your money safe.
Improve Your Risk Management Strategy
Risk management is one of the most important things to consider besides your trading plan.
Your risk management plan involves identifying and evaluating any financial risks in your trades. This allows you to come up with a good strategy to minimize your losses.
It’s impossible to eliminate risks completely, but if you’re able to identify everything that could hurt your results, you’ll do better in your daily trading.
Don’t Follow the Hype
As mentioned before, social media is one of the main culprits regarding crypto FOMO. A lot of people run to invest in an asset when their favorite influencer talks about it.
Even if you see a lot of people investing in something because an influencer promoted it, don’t act until you verify the information.
You must always invest based on your own research. Relying your strategy on hype will only get you bad results.
Understand That You Won’t Always Win
It’s a tough pill to swallow, but when it comes to crypto, it’s impossible to win all the time.
Once you understand that you’ll face losses eventually, you’ll be more grounded. This will allow you to make logical decisions instead of emotional ones.
Learn from Your Mistakes
Even if you fall into the trap of FOMO, don’t worry; we’ve all been there.
The best thing you can do is learn from your mistakes. If you lost profits because you invested in crypto after hearing news about it, you now know that you can’t rely on information right away.
In any case, you should always double-check the information you get. If you’re logical instead of emotional with your investments, you’re less likely to make a mistake.
Bottom Line
FOMO is hard to fight, but it’s not impossible. As long as you are at peace with the fact that you can’t get rid of it completely, you’ll have a better time controlling it.
If you’re struggling with FOMO in any context, take your time to breathe and decide whether you’re truly making a good decision. You can also seek support online; many people are going through the same experience.
