What does FOMO crypto mean?

• FOMO means the fear of missing out on something and is a common phenomenon even outside the world of crypto

• FOMO can bring big gains as well as big losses

• A trader is most likely to experience FOMO when there are all sorts of hypes in the marketplace

• FOMO can put a trader at unacceptable risk

• FOMO and bull markets are inextricably linked

• Social media and advertisements attempt to elicit FOMO from general public

• Influencers tend to buy in coins first and then persuade their subscribers via FOMO to get in too, so they can sell for a lot of profit

• Doing your own research can prevent FOMO by making plans based on your knowledge and not on what you hear

• If you want to sleep well you can also be happy to miss out on everything, because a good foundation is the basis of any working strategy

What does FOMO crypto mean?

FOMO stands for Fear Of Missing Out, as mentioned. Literally, the word FOMO means the fear of missing out on something. This is a common phenomenon in psychology.

As we live our lives, there are all kinds of social events we don't want to miss. That soccer game, that graduation party, the new movie of your favorite actor or director, the Fear Of Missing Out flies around your ears.

This phenomenon also occurs in the world of crypto. Of course, you don't want to miss the one coin that goes x10 or forget to buy the new hype coins that harbor high potential profits. You let emotions guide you, the worst advisor in crypto land.

The grass is always greener next door, but after this lesson, you will even be satisfied with a yellow lawn, as long as it is your own choice.

The speed of FOMO

With the advent of the Internet and social media, FOMO is happening faster and faster. Information reaches large groups of people within minutes where it used to sometimes take months to years for information to reach you, if it did at all. Success stories lead to actions by the readers of those stories much faster.

The origin of the acronym FOMO

Dr. Dan Herman first mentioned FOMO in 1996. He referred primarily to buying behavior, describing it as, "Standing in a candy store with only a quarter in your pocket."

Cell phones have greatly expanded FOMO by allowing everyone to constantly keep track of what they are missing by following all kinds of social media. There is a strong link of FOMO to anxiety especially, but also to depression. Others have it nicer, better, are more successful, et cetera. While this is often not true at all, as long as you don't compare yourself to the extremely successful people.

How does FOMO crypto work?

FOMO is about not wanting to miss opportunities in the crypto world. This fear of not wanting to miss anything can yield big profits, but it can also lead to a lot of losses. It's not for nothing that the saying goes, "Fear is a bad advisor." FOMO causes you to stop thinking clearly and often make wrong choices or even enter blindly just to not miss anything. Your timing can be so bad that you buy a coin at its peak after which the price drops.

Hype FOMO

Just imagine that a certain coin is on the rise, breaking one record after another. At some point you become a victim of FOMO and decide to buy heavily into this coin. Just at that moment, the correction and within a day it goes down 25% and a few days later it has lost 50% of its value.

You save what's left to save and quickly sell it. That cryptocurrency then decides to make another run and rise sharply again. Way above where you bought it last time. So you gather your courage and buy big again. Only to find out that you're faced with another big dip and quickly sell again, which means you've now lost a large amount of money with a very popular coin.

This is a scenario that happens quite often in the crypto world. FOMO can make you do things you don't expect yourself to do. Normally, you might be a very cautious trader, but you let yourself go once because you see an outside opportunity.

Hype success at FOMO

However, FOMO works both ways. You can also fall victim to FOMO at a profitable investment opportunity and buy that rapidly rising coin in bulk and it continues to do what it has been doing for a while, which is quote higher prices. At the first signs of a correction or dip, you quickly sell it again, because you know from experience that this can add up quickly with a coin that has risen so quickly.

Then you see that it starts to rise again and you buy it big again. You take into account that it can also fall significantly and plan to sell quickly at the first signs of decline. You see that it rises sharply in price and when it dips you sell it quickly. In the latter case, you have gained a lot.

There are a lot of possible scenarios in the case of FOMO. With a hype coin, things can go very fast, but there are also cases that go a lot slower. In fact, a hype is nothing but a herd of traders doing the same thing. By taking advantage of FOMO, pump and dump groups also flourish.

FOMO due to rising stock prices

When the prices of crypto and especially Bitcoin have been rising for a while many people get the itch. Should I get in too? Soon I will have to buy way too high.

This fear prompts people to start buying in, so there are more buyers than sellers and prices start rising. The market may have made the turn into the bull market.

Changing crypto market 2024

Looking at recent times, we see that in recent years there has been no bull market been more after the big one after the 2020 halving, except after the adoption of the Bitcoin ETF. This in itself was strange, because Bitcoin did rise from around €20K to €40-50K. However, the altcoins continued to move sideways, causing the Bitcoin dominance again skyrocketed to around 50%.

Bitcoin ETF and flaming prices

After several Bitcoin ETFs entered the market, Bitcoin soared above its All Time High to about €67K and altcoins suddenly found they had to join in as well. Many altcoins rose as much as 200-300% during this short period. When Bitcoin cooled off and started to fall a bit again, altcoins lost a lot of value very quickly and ran roughly back to their price from the time before the Bitcoin ETF was approved by the SEC.

Of course, everyone was hoping for a very long bull market after the Bitcoin halving from 2024 would arise and wondered whether he should sell again or not. One thing was clear: FOMO had turned into FUD (Fear, Uncertainty, Doubt), as seen in the Fear and Greed index.

FOMO and a bull market

When prices have been rising for a while and there is one breakout after another, there is a bull market. In a true bull market, large groups of people get FOMO and start buying en masse, with prices rising further and further, until the buyers run out.

The more the price goes up, the more buyers join, until there are no more new buyers, because all those interested, even your neighbor and the barber, have already bought. Then the prices go down and often very quickly.

Most money is lost at the end of the bull market, because the buyers who got in last still have hopes that prices will rise again and are unaware that cryptocurrency prices can lose up to 90-95% of their value in a bear market. Coins can even disappear altogether.

Crypto FOMO due to social media

If you're on social media a lot you'll also come across conversations about cryptocurrency when the prices are soaring. Especially if you are also in groups where cryptocurrency is the main topic. The question is whether you actually get anything out of all those stories.

When all these people sit around talking about how much they are earning and how much more they can earn, many people get FOMO. They also want to see if they can earn as much as those others.

Often these people get in when the prices have already risen considerably, which means the potential profit margins are considerably lower. Some unlucky people even buy in at the height of the bull market and immediately begin posting losses.

FOMO due to news and advertising

Many advertisements make clever use of FOMO. If you see a commercial that has the message that you are left behind while the others, who do have this product, are out partying, or something similar, this is a FOMO trick. They pretend that with their product you can be anywhere and try to play on your emotions.

The most thoughtful way to take advantage of FOMO is the Postcode Lottery. When you see that winner's caravan on television passing by a street, many people imagine that this is happening to them and that they don't have a lottery ticket. They then only buy a lottery ticket because of FOMO, because that caravan also passes by people in the same street who didn't have a lottery ticket! How must they feel? You want to save yourself this misery. Sneaky thought, though.

The timing of crypto advertisements

If crypto prices have been rising for a while you will see that crypto is increasingly in the news and that there are more and more advertisements for investing in crypto at a broker or an exchange.

The news gets your attention and the advertising makes you know where to buy crypto.

Brokers and exchanges need buyers and sellers to pay their bills. They also know very well that the best time to advertise is the time when prices just keep rising. In all other market conditions, their targets, the new entrants, are only hard to reach because there is no positive excitement in the market.

When people see all this positive news and through advertising know where to go, the itch starts to come and many just start trying. FOMO has struck.

FOMO through influencers

Influencers are individuals who use social media channels to try to influence their often ever-growing following, such as to buy products that benefit them.

The crypto world also has influencers running around trying to influence their listeners. Usually they give the impression that it is all about you and that they are trying to teach you all kinds of things, but this is not the case at all with most of them.

Influencers' influence

An influencer is trying to sell things to you. He wants you to become a referral at a broker or exchange, he wants you to subscribe to the channel so he can get more viewers and get paid more, and he wants you to buy his products, such as his own expensive courses or those of others as an affiliate. He also wants to peddle a newsletter to spam you with all kinds of offers. If you also happen to benefit from this he doesn't mind too much, mind you. But never forget that it's all about him.

Conflict of interest influencers

Many of these influencers also buy cryptocurrency themselves. For this reason, they are often untrustworthy because they often own the coin they are shilling and the more buyers, the higher the price, so he can drop his bag as quickly as possible for a higher price. He can also spread FUD to get a particular coin at a lower price so he can get a more favorable purchase price, after which the shilling begins again. If you start paying a little closer attention to the FOMO and FUD campaigns, you get a better and better understanding that they say nothing about what a coin or the market is going to do.

Conflicts of interest are common among influencers, but if you are aware of this you can take this into account or even stop listening to them. No one knows what the market is going to do or which coins are going to rise. Influencers often just want to give their own coins a hand by pretending it's the best buy of the moment and fiddling a bit with statistics and technical analysis to get you in FOMO state with logical resembling predictions.

Preventing FOMO

If you do not want to be overwhelmed by Fear Of Missing Out you will have to choose for yourself when to buy a cryptocurrency and at what price and when you plan to sell it again and at what price, the so-called Do Your Own Research which means thorough research by investors with perseverance.

"Doubt everything you can doubt."

This means that you will have to draw all conclusions yourself, without influence from any source. Decisions are then purely based on research you have done yourself and thus more reliable the more you have several studies in crypto behind you. This way you avoid choosing wrong moments to buy and sell.

Know the market cycle

With many cryptocurrencies, this strategy is possible. After all, buy low and sell high is the goal. If you know what a low price is and what a high price is, you can handle this pretty well when you start trading. Study the market cycle and then you will also have some global buy and sell moments in view, including the prices that go with them. This is only possible with coins that exist for more than 4 years, otherwise they have not undergone a full market cycle, along with Bitcoin's 4-year cycle.

"Be greedy when others are fearful and fearful when others are greedy."

Global timing of the market

If you looked at the Fear and Greed Index and you had worked with this in recent times in 2024 you could have sold high when Greed was high and bought back low when Fear was high. Nobody can time this perfectly, but if you time it approximately it's pretty good. Then you sell around the tops and buy around the bottoms. FOMO makes you retain coins when the Greed is high and FUD makes you not buy coins when the Fear is high. No one said it would be easy. But the Index is there every day.

It is not a law of averages, but a very good guideline. It may well be that in a bull market Greed is very high for a long time, but if all goes well you have already bought the coins long when the rest was afraid and actually wait until about the beginning of the bear market when the Greed % gets lower or with the arrival of Fear, at which point you sell the coins.

Stick to your plan

Another way to avoid FOMO is to not go with any trend or hype, because the temptation is great, but so are the risks. If you only buy cryptocurrency because you have confidence in it after analysis, then you also won't panic if things go against you. A hype coin can collapse tomorrow, after which you can suffer big losses. If you don't know what to do at such a moment, FOMO can cost you a lot of money.

The point of crypto trading is to know more or less what you are doing. So don't fall into the trap of FOMO, as this can tempt you to make purchases that put your goals further out of sight. A good crypto portfolio strategy can help you do that.

Joy Of Missing Out

Let's end with the Joy Of Missing Out, JOMO. If you are not pulled along on the rollercoaster called FOMO by any hype, trend or other kind of influence, then you can also see that as a very positive thing. True, you may have missed opportunities, but you slept extremely well and didn't take any unnecessary risks. The JOMO can also make your day, in that you know what you are doing and don't need all that excitement.

"The only thing we have to fear is fear itself."