An acronym that stands for “Fear of Missing Out.”
What Is FOMO?
“Fear Of Missing Out” — otherwise referred to as FOMO for short — is a term that is used to express the anxiety you could feel if you don’t act quickly when making trading decisions. The idea behind it is that any delay could cause you to miss out on a potential opportunity.
For example, you might get FOMO when you see a coin that you don’t own, increasing in value. That green line ticking upwards is enough to spark panic in some, causing them to race to buy whichever coin seems to be soaring in price. The fear of missing that next big win, the coin everyone wants (but can’t have) or being the trader left behind, can be a driving force in price variations.
Of course, trading in cryptocurrency can also be a game of rumors and emotion, and FOMO can play a key role when traders decide what to, buy, sell or hold on to. FOMO can even lead some to switch markets or pull their assets out of a certain market entirely, placing them into their own cold wallets.
While the emphasis on FOMO is more often placed on the fear of missing out on a profit-driving coin, the opposite can also be true.
A sudden drop in Bitcoin could be attributed to a variety of causes, with trades happening at dizzying speeds. Whispers of government regulations or markets that are out of favor are enough to cause many to oversell.
When coins surge to an all-time high, traders may also want to cash in while it’s hot, leading others to follow suit. Holding out means you might sell when the price is already falling again, so you would have missed out on the big profits of a price peak. In the world of crypto, anything can happen.