FOMO Factor: Understanding the fear of skipping in the cryptocurrency space
In recent years, cryptocurrency has exploded to the global financial scene, fascinated by the attention of investors, merchants and enthusiasts. However, after this rapid growth, the surface is a more complex phenomenon – the fear of skipping (Fomo). This psychological driver encourages the crazy pace of the cryptocurrency market, encouraging the participants to buy another big thing without fully understanding its potential risks.
What is Fomo?
FOMO means anxiety or fear that individuals experience when they perceive others as an advantage over them in a given situation. In the context of cryptocurrency, Fom is manifested in a variety of ways such as ::
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- P2P networks : P2P networks such as Telegram and Signal have allowed individuals to contact others by sharing information, prices and forecasts about cryptocurrencies.
FOMO Psychology
Studies show that Fomo is closely linked to the psychological concept of “desire loss”. When people perceive loss or fear of skipping (phomo), they tend to overestimate profits and underestimate the risk. This cognitive bias can encourage individuals:
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FOMO Effect of Cryptocurrency Investors
FOMO has a great influence on the cryptocurrency market. Here are some examples of real life:
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free from fomo
While phomo can be powerful force in promoting growth and innovation, it is very important to acknowledge its restrictions. To avoid the surrender of Fomo:
- Set clear goals
: Define your investment strategy and tolerance before entering the market.
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- Drive your portfolio
: spread your investment in various asset classes and markets to reduce the effect of any particular cryptocurrency.
- Don’t be afraid of FOMO : Avoid getting involved in social media or trade for social status.
Conclusion
The fear of skipping (phomo) is a huge psychological engine in the cryptocurrency space, promoting rapid growth, but also creates unnecessary risk. Understanding FOMO psychology and taking action to manage its effects can make more based decisions and avoid this anxiety. As the cryptocurrency market changes further, it is very important to know about this psychological dynamics and to apply our investment strategies accordingly.
Links:
- Timothy J. “Psychology of Fear in Financial Markets”.