Last Christmas, there was a weird moment where people who I hadn’t spoken to in years began to ask me what cryptocurrencies to buy and where to buy them. With hindsight, this was clearly the top of the market, and they had a case of FOMO. Unfortunately, for those that did buy in at this time, they have most likely lost some money.
FOMO is real. I’ve suffered from it myself. It’s also a terrible habit. By becoming scared about missing out on future profits, people make rash decisions. The old moniker of buying low and selling high rarely ever works out that way for many people. Instead, they buy high, sell low. This comes down to human psychology. The FOMO becomes too much and people decide to plunge their fiat into already all-time highs.
Likewise now, with the recent bear market, sentiment in the wider public has changed. Rather than people asking me how to buy cryptocurrencies, they are now asking why I’m not selling. Those who didn’t want to buy Bitcoin when it was at $8k or $6k because it was too expensive now don’t want to buy at $4k because the price is going down. The logic is understandable, but ultimately wrong.
The same issues have been prevalent in Bitcoin since the beginning. The price has always been extremely volatile, with huge movements upwards followed by extreme downward pressure. This is the first lesson in the world of cryptocurrencies. If you don’t understand this most basic of premises, you’re going to have a bad time.
Whilst there is clearly a natural instinct within human psychology to FOMO, being able to understand this part of your psychology can help you make better decisions. Rashness is a curse. Time is forever moving forward. There is no need to rush. Take your time, do your research, and when you finally do move into cryptocurrencies, don’t do it because of FOMO.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.