The fear of missing out in Crypto , or FOMO , is an omnipresent psychological phenomenon on the financial markets, particularly in the universe of cryptocurrencies. This term, which means "the fear of missing an opportunity" , was popularized by Patrick J. McGinnis in the early 2000s to describe how the fear of missing an event or a trend pushes individuals to make impulsive decisions .
In the cryptos sector, this dynamic is exacerbated by the extreme market volatility and the rapid dissemination of information via social networks and influencers . Many investors, seeing a cryptocurrency climbed, feel the fear of missing out specific to cryptos and buy under emotion, without rational analysis. This behavior can lead to purchases at the top of the market , just before a brutal correction.
The FOMO is particularly present during the bull run S , where collective euphoria feeds a wave of frantic shopping. Conversely, during Bear Market , this phenomenon decreases, leaving room for the opposite effect: Fear, Uncertainty and Doubt (Fud) , which pushes investors to sell in panic.
💡 Understanding the fear of missing out in crypto makes it possible to adopt a more rational approach and to avoid the emotional traps of the financial markets.
Table of contents
What is the Fear of Missing Out (FOMO)?
The fear of missing out in Crypto is the feeling that other people around you enjoy an opportunity you might miss. In an investment context, it results in the fear of not buying a cryptocurrency before its price soar. This feeling often pushes investors to enter the market without having carried out in -depth research, simply because they are afraid to "miss the train".
In daily life, the FOMO can manifest itself by the fear of missing a social event, a flash sale or any other opportunity. But it is in the financial markets, and more particularly in cryptocurrencies, that this fear has a more intense dimension, due to extreme volatility and potential gains.
How does the Fear of missing out influence investors in cryptocurrencies?
In the world the fear of missing out in crypto plays a central role in the investment decision. When cryptocurrency begins to record a spectacular increase, small beginner investors, often influenced by mass media, are attracted to the promise of fast gains. This is often amplified by influencers on social networks or even public figures like Elon Musk , who has contributed to the popularity of certain cryptocurrencies like Dogecoin . These investors generally arrive late, often after initiates and whales (major cryptos holders) have already bought at low prices.
The sudden influx of new investors adds liquidity on the market, which can create a last price thrust. These beginner investors can even make a small added value, but often do not understand that the market is already at its top. Meanwhile, more experienced investors, aware of market dynamics, are starting to take their profits. This leads to a market correction, where those who have given in to the fear of missing out often find themselves undergoing significant losses.
Why is the Fear of missing out particularly present in the cryptos market?
The cryptocurrency market is incredibly volatile. Prices can increase or decrease spectacularly in a very short time. This volatility, coupled with cycles of bull run and Bear Market , makes the Fear of missing out particularly present in this sector. Investors, seeing rapid gains made by others, feel pushed to enter the market without being fully aware of the risks.
Another aggravating factor is the way in which information circulates: social networks, discord or telegram , but also visual tools like Crypto Bubbles , which display the strongest increases or drops of cryptomonia in real time, contribute to this purpose of mass. Seeing a green "bubble" flash with +70 % in 24 hours, he becomes tempting to want to buy without reflection, for fear of missing the opportunity.
In addition, cryptocurrencies are still a relatively young market. This combination of volatility, rapid potential gains, and a lack of general understanding feeds a climate where the prosperous Fear of missing out .
The stages of the cryptocurrency cycle and the role of the Fear of missing out
Market phases: Bull Run and Bear Market
Market cycles are particularly pronounced in cryptocurrencies. The bull run , where prices soar, is the period when the fear of missing out on cryptos reaches its peak. Investors, seeing prices climb, rush to buy for fear of missing an opportunity. But when the market enters a Bear Market , many end up selling at a loss, realizing that they bought at the highest.
Accumulation phase: anticipation of gains
The accumulation phase is often the period when wise investors are starting to accumulate assets at low prices. The FOMO is not yet present at this stage, because the market is relatively calm. But as soon as the price is starting to increase, the F Ear of Missing Out sets up.
Bull Run : Apogée du Fear of missing out
It is during a bull run that the FOMO explodes. Investors rush to buy, often at already very high prices. At this point, small investors generally arrive too late and buy while the market is close to its summit.
Correction and Bear Market: The consequences of the Fear of missing out
Once the market corrects, investors who have given in to the Fear of missing out often find themselves for sale at a loss. They bought at the top and could not bear the drop in prices.
Concrete examples of FOMO on the cryptocurrency market
The case of Bitcoin in 2017
In 2017, when Bitcoin reached nearly $ 20,000, a shopping frenzy took place, fed by the F Ear of Missing Out . Many investors bought at the top, before Bitcoin's price dropped dramatically in 2018, leaving many investors with significant losses.
The craze around Dogecoin in 2021
In 2021, Dogecoin , powered by Elon Musk tweets, saw its price soar. Many investors have given in to the Fear of missing out and bought Dogecoin attracted by the promise of fast gains. But those who bought at high prices have often seen their investment losing value when the market has corrected.
How to recognize the signs of fear of missing out in crypto?
The Fomo manifests itself by impulsive behaviors, such as buying cryptocurrency simply because its price rises. Even if an increasing price is often a representative element of a possible gain in interest on the project or a stronger use of the protocol, this is not always the case. This is particularly true in such a young therefore speculative market as that of cryptocurrencies.
The consequences of the Fear of missing out on investments
Purchase at the top, sale at the bottom
One of the most common consequences of the Fear of missing out is to buy when prices are high, and to sell in panic when the market turns. This often leads to significant losses.
Loss of rationality and emotional control
The fear of missing out leads to a loss of rationality. Investors let themselves be guided by their emotions rather than an analysis based on facts, which pushes them to make impulsive decisions.
Strategies to avoid giving in to the Fear of missing out in crypto
Define a solid investment plan
To avoid the FOMO , it is essential to have a clear investment plan. A well -defined plan will help you make decisions based on objective criteria rather than emotions.
The importance of research and basic analysis
It is important to do in -depth research on cryptocurrencies in which you want to invest . Do not only be fooled by prices or media craze. Analyze the fundamentals of cryptocurrency, its technology and its use case.
Set up an output strategy
An effective investment strategy also includes an output strategy. Rather than trying to predict the exact summit of the market, it is often recommended to use an output strategy in stages , with price objectives defined in advance. This makes it possible to secure gains while limiting losses if the market turns suddenly.
Platforms and tools to follow whales and market movements
There are several tools to follow market movements and identify the actions of whales. Platforms like DeFi LLAMA or WHALE ALERT allow you to follow important transfers and to better understand the dynamics of the market.
The dangers of the same corners and the Fomo
The same corners: a source from Fear of missing out Far
The same corners like Dogecoin or Shiba Inu often attract unexpected investors, largely because of the FOMO . These cryptocurrencies are experiencing spectacular climbs, but their value is based even more on speculation than on solid fundamentals.
How the same corners attract unexpected investors
The same corners are often vectors of F Ear of Missing Out for new investors, who see fast gains without understanding the associated risks. However, these assets can quickly lose value, leaving investors with significant losses.
How the Fomo is used to manipulate the Cryptos market
Some whales and insiders use the Fear of missing out to manipulate prices. They create an artificial demand by disseminating positive information on a cryptocurrency, then sell their assets in mass once the price has reached a summit, causing a sudden fall in the market.
Conclusion
The Fear of missing out in crypto is a powerful psychological phenomenon that strongly influences the behavior of investors on the cryptocurrency markets. Understanding the underlying mechanisms of this fear and knowing how to identify it will allow you to make more rational investment decisions. The key to avoiding the Fear of missing out is to stay disciplined, to stand for a solid investment plan and not to let emotions guide your decisions.
Faq
1. What is the FOMO in cryptocurrencies?
The FOMO is the fear of missing an investment opportunity, which often pushes investors to buy impulsively during a price rise.
is the FOMO bull run ?
The FOMO is particularly intense during a bull run because prices are increasing rapidly, encouraging investors to enter the market for fear of missing fast gains.
3. How can I avoid giving in to the FOMO ?
To avoid FOMO , define a clear investment plan, do in -depth research, and follow an exit strategy with well -defined price objectives.
4. What are the risks of an investment under the effect of the FOMO ?
Investing under the effect of the FOMO can lead to the purchase of assets at too high prices, followed by significant losses when the market turns.
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Yohan Uzzan
Training engineer, I quickly became interested in the field of finance. Convinced that decentralized finance has a bright future ahead of it, I participate in its democratization by developing Crypternon.
