FOMO (Fear of Missing Out) is arguably the worst financial advisor ever. Not only is FOMO responsible for inflicting misery on a lot of people, it also tricks people into committing some of the biggest blunders of their lives. Both these assertions are twice as true, when it comes to crypto. 

Why is FOMO A Major Problem in Crypto Trading and Investing?

There are several reasons that FOMO has become a dominant force in the world of crypto, some of which are:

  • We are constantly being bombarded by news and information of crypto investors getting tremendously rich overnight. The most prominent success stories are related to Bitcoin and Ethereum – currencies with the largest trading volumes and market capitalizations. 
  •  People know the promising potential behind blockchain and cryptocurrency. Even though the Bitcoin boat might have sailed for a lot of us, there is still the possibility of investing in a coin whose value might shoot through the roof in the coming days or weeks. People are aware of this possibility, and feel that they cannot afford to miss out. 
  • The crypto market is still in its infancy, and is therefore extremely unstable. This means that the price of a particular coin is heavily dependent on people’s perception of the coin. Hence, abrupt mood changes can lead to sudden drops or increases in market prices, creating opportunities for people to hit the jackpot and get rich quickly. There is no denying that, if you seize the right buying and selling moment, you can benefit from impressive gains. 
  • Since crypto investing and trading is associated with low entry barriers, it has become extremely popular within people from all walks of life. Unfortunately, this also means that many people dive right in, without gaining the relevant education and experience. 
  • FOMO, at the moment, is one of the biggest reasons that people step into the world of cryptocurrencies. This is almost identical to when people started to mine gold in the hopes of seeking a fortune. Only this time, this gold is digital. 

Overcoming FOMO in Crypto Investing and Trading:

The FOMO problem is big, but that does not mean that it cannot be dealt with. Here are a few ways that will help you turn the FOMO switch off and make smarter crypto decisions:

  1. Disconnect:

This is perhaps the easiest way to eliminate – or at least cut down – on crypto-related FOMO. Perhaps you have been spending a lot of money on one or a few coins in the hope that their value will skyrocket? If so, you need to take a step back and turn your attention and energies to other interesting things. 

It is important to remember that, while making money and having a secure future is essential, it is not the sole purpose of life. Try being more mindful and living in the present – play a sport that you love, hit the gym, or reach out to your friends and plan that trip that you have been avoiding due to crypto FOMO. Turning your head away from the screen and towards the sun will enable you to slow down, lower your anxiety, and return with an improved state of mind. 

  1. Remember that Losing is Inevitable:

One of the main reasons that lead to FOMO in crypto traders is their fear of losing. The truth is, defeats and disappointments are inevitable – and often essential – no matter what you are doing in life. 

You should also remind yourself that even the most successful traders have lost money – only that they have been loud about their successes and kept quiet about the failures. Like we mentioned, the crypto market is extremely unstable and unpredictable, and it is very easy to make wrong predictions and decisions. 

Your main objective should be to develop a sound trading strategy and stick to it, in order to minimize your losses. 

  1. Know that Your Subconscious Cannot Always Be Right:

 A lot of beginners tend to trade with their gut and ignore their brains. If you ‘feel’ like you need to buy a coin, take a pause instead of acting on that feeling immediately. Our subconscious always has the best intentions for us, but it does have the tendency to inadvertently hijack our reality and lead towards bad decisions. 

If this concept is hard to understand, let us assume that a person is dieting. They are convinced that doughnut or ice-cream will make their body feel great. So, should they act on their body’s message, or stick to the nutritional plan that they have carved out? You get the point. 

Final Word:

In order to be successful in the crypto-sphere, you should understand the concept of FOMO and know how to tame this wild beast. We hope that this blog will help you achieve both these objectives. 

To learn more about crypto trading, please feel free to check out some of the other blogs on our website.