8 December 2021
Cryptocurrencies are always part of Trending Headlines mainly due to their ever-increasing popularity and price explosion. This makes everyone highly tempted to dwell in the Crypto market and make millions. However, it is very well-known, digital assets are extremely volatile and unpredictable. Since their inception, numerous cycles of growth and decline have been witnessed.
Every time the market booms, too much adrenaline rushes in a trader's veins. Likewise, seeing the large green numbers, traders often feel the itch to buy or swap for crypto, creating a buzz. Of course, there is nothing wrong with buying or swapping for crypto; but timing matters. And unfortunately, many people are terrible at timing it out simply because their emotions get the best of them. This phase is known as FOMO, or the Fear of Missing Out.
FOMO is an acronym coined by the Millennial generation and has become the bane of many peoples' existence. It may sound coarse or even somewhat overly casual when you say it, but it's a fear everyone goes through while trading. Ideally, FOMO is an irritation that is felt when you see your neighbours or friends enjoying your missed things. It's like a nagging voice that haunts you, "Everyone is more Happier than you." Or, in the case of cryptocurrency investment, "You're missing the boat of good investments."
FOMO stands out to be one of the worst financial advisors ever. This type of fear is a serious community issue because it forces traders to invest in ICO scams, panic-selling at the time of a crypto dip and insisting on getting insider deals on tokens that never go anywhere. Investing should never be an emotional endeavour, and if it's so, you will definitely incur huge losses. Keeping this in mind, here are some ways to identify Crypto FOMO and strategies to combat it effectively.
How to Identify FOMO?
- Everyone is buying this coin. So there must be something to it, as all cannot be wrong
- It would be silly if I don't take risks. Let's see how much money I make.
- I guess the price will surely explode!
- This coin is continuously in talks; there should be something I don't know
- If the coin grows big, I will never forgive myself for missing this opportunity.
As seen above, FOMO traders often follow the crowd and make decisions based on greed and guessing.
Note: Every day brings an exciting Crypto offering lucrative offers, but remember, for every cryptocurrency that is being traded and accepted by the mainstream, there are many, many more that are tossed away quickly.
7 Strategies to Overcome Crypto FOMO
1. Crypto Detox: It's one of the simplest ways to beat FOMO. If recently, you have been spending too much on cryptos in the hope to make millions. Then you probably need a Detox. Try to distract yourself for a while and do other interesting things like playing a game, doing a workout, or joining your friends for a short trip. Keep in mind that life is not limited to making money and securing your future. A slight slowing down can help you to overcome anxiety and make life-threatening mistakes.
2. Losses are inevitable: To reduce the Fear-of Missing-Out, you must realize that nothing is shameful in losing a good opportunity. It's a part of any financial trading. The earlier you realize this, the faster you become an advanced trader. It also should be understood that most traders prefer to share their success stories and keep quiet about their losses. Besides this, it is hard to estimate what will be the price of crypto tomorrow. Therefore, losses are inevitable.
3. Analysis of Crypto market: Trading is fun, and learning some techniques like Fundamental and Technical Analysis can be even more exhilarating. The successful stories of BTC and ETH stir the imagination of many traders and investors. Therefore, every new coin markets itself as "a new Bitcoin", offering a unique opportunity to create wealth. All you need to do is get a good dose of reality. Check statistics to realize that for every BTC or ETH, there are hundreds of shitcoins. Each of them pretends to be innovative to attract FOMO-driven investors.
Also Read: What is Technical Analysis?
4. "What Ifs" never works: Many traders are afraid of missing the next big thing, like buying Bitcoin or Ethereum at the lowest price. They continuously think of how much money they would have made in this missed opportunity. For some, it is a life-shattering mistake. But, always remember, thinking about what could have happened is a total waste of time. Instead, use your time, skills and expertise to develop your winning strategy.
5. Avoid buying every Dip: This is most commonly done when the market crashes to make huge profits. Keeping volatility in mind, if the prices are falling, avoid buying any coin with the hope that they will surge. Sometimes, it may go down further in price and take a long time to recover.
Tip: Only invest in projects you believe in, and have the long-term potential to do well.
Also Read: What Is Bitcoin Fear And Greed Index?
6. Avoid Emotional Trading: Many Traders follow their guts and not brains. If you have "a strong feeling" about some coin, do not buy it immediately. Often our subconscious hijacks our reality and forces us to make poor decisions. Investing is not always emotionally satisfying. There will be times when you feel like you're right, and there will be times when you feel like you've been wrong the whole time. Investing requires a solid commitment to holding your asset regardless of the market price at any point in time.
7. Read about Scams: Instead of concentrating on success stories, use Google to know more scams. The famous pump-and-dump scheme in which scammers make the price of some shitcoin rise sharply. It mainly attracts FOMO traders who believe they have spotted the "next big thing". When the price reaches a certain peak, the scammers sell their coins and earn huge profits at the expense of other players.
To deal with FOMO, we recommend you acquire a strong knowledge of the crypto market and explore all its pros, cons, and pitfalls. Do not blindly follow the social media hype; always do research first and find out why this coin is worth investing in.
Disclaimer: The author’s views and opinions are for informational purposes only and do not constitute financial, investment, or other advice.