FOMO is an acronym that stands for “fear of missing out.” Crypto traders use this term to describe the fear of missing an investment.


What is FOMO?

FOMO is an acronym that stands for “fear of missing out.” Crypto traders use this term to describe the fear experienced when they think they are missing out on a trade or profitable investment opportunity.

The Long Answer:

The term “FOMO” refers to the anxiety experienced when crypto traders see others making a profit from an investment and are afraid that they’ll miss out on potential gains if they don’t jump in immediately.

People experience FOMO for a lot of reasons. However, when used in terms of investment actions, it describes the intense feeling that you are missing out on the next big crypto bull run, and the subsequent large profits.

As such, FOMO is often a major factor why traders invest in crypto based on unverified and potentially false information.

And this is why Dypto always says: LEARN BEFORE YOU LEAP.

what is FOMO

Why Does FOMO Happen?

Many new crypto traders buy when prices are at an all-time high. This sounds like an easy thing to avoid, but it’s actually a major issue. New and inexperienced traders see tokens doing well and don’t want to miss out on profit. In reality, however, they often end up losing money.

According to known trading psychology, traders are most likely to make FOMO-based decisions when a bullish market is at its peak. Trust is high in the market and prices are still rising because the market has been buyer-positive for so long.

During this time, traders often feel like nothing can go wrong, so even though they may have missed the initial spike, they can still make money. They justify this by thinking prices will continue to climb and while they won’t make as much as they would have if they invested initially, they’ll still be making money.

The cycle of FOMO illustrated with a mountain

Do I Have FOMO?

We all experience FOMO but not always the same way.

If you want to know if your drive to invest in a particular cryptocurrency is FOMO-driven, here are FOMO-based decisions, you might experience:

  • Obsession or anxiety over a particular stock or crypto
  • A constant need to follow social media and stay updated on the latest news and trends
  • Investing in a cryptocurrency because of a social media movement, unprecedented popularity, or a sudden and steep rise in price.
3 symptoms of FOMO

How to Avoid FOMO (Fear of Missing Out)

FOMO can be troublesome, so here are some essential methods you can use to avoid it:

  • Keep a trading journal where you record your reasoning and strategy behind the investments you make
  • Create a trading plan and stick to it
  • Work with someone or sit down yourself to create a detailed risk management plan
  • Do your own research before deciding to invest. You should spend at least several hours researching a cryptocurrency before you invest in it.

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