Among the various terms, there are two key factors and concepts which are known as FUD and FOMO, which both have a big effect on cryptocurrency. Read and share this content with your relatives who love cryptocurrency articles. What is FOMO in digital currency?
The digital currency market is a global market and like any other market, it is affected by several different factors. This market can be affected by legislation, economic conditions, supply and demand, new technologies and several other factors. Of course, in the cryptocurrency market, there are two other factors that have a great impact on the price of digital currencies, and those factors are the fear of losing an investment opportunity or FOMO and fear, uncertainty and doubt (FUD). But what is FOMO and FUD? In this article, we discuss FOMO in digital currency, the term FUD and the impact of these two feelings on the cryptocurrency market. Stay with us.
FOMO in digital currency
What is the effect of FOMO in the digital currency market?
Like traditional markets, the digital currency market is affected by various factors that cause the increase or decrease of various currencies. But the factor that has a great impact in this market is FOMO. It may not be out of place to say that the effects of FOMO in the growth of the digital currency market are incredible. Many huge events in this field have taken place due to FOMO in digital currency.
Currencies such as Bitcoin, Ethereum, Litecoin, etc. are all examples of currencies that have grown significantly. Currently, most people active in this market are aware of its huge and incredible opportunities and do not want to miss any opportunity.
Crypto slang terms
HODL Distortion of the term hold
In investment it means holding shares: Hold On For Deal Life (stick as if your life depends on it). A crypto trader who buys a coin with no intention of selling it in the foreseeable future is called the holder of that coin.
FOMO Short for "fear of missing out"
The feeling you get when you see a significant rally on a chart but you don't have that coin, so you panic and sell your other assets to buy it. Since crypto trading is still largely based on emotion rather than valuation, FOMO is an important factor when swinging for cryptocurrency trading.
FUD in crypto
What are the symptoms of FOMO?
FOMO has symptoms that you can be sure you have this fear too. FOMO In the digital currency market is mostly caused by people who have less experience and do not have the power to analyze the market. So maybe people who have lost their big funds in this market. But it must be said that the continued existence of this fear has destructive effects on a person's psyche. Among the symptoms seen in people with digital currency FOMO include the following.
They are constantly checking the price of digital currencies
Checking currency prices is the first sign of FOMO in cryptocurrency, which is seen in abundance among traders. It is very early to repeat this action, that is, they check the price of cryptocurrencies once every 5 minutes.
They spend a lot of time on social networks
People involved in FOMO spend most of their time around the clock on social networks and constantly follow the latest news related to cryptocurrencies. The reason for this is their concern about missing out on opportunities. Social networks are an important factor in creating fear in people.
They have a herding mind
Society and groups of people are powerful and permeable. When you join a community or group belonging to digital currency, you are automatically influenced by their decisions and behaviors. For example, when you see that the majority of people in this group or community are investing in a certain currency and it is rumored that it will grow significantly in the future, you may also be affected.
If you are influenced by the crowd and do the work of the group without research, you are suffering from mental abuse or FOMO. This causes biased behavior on your part. So that you take risks and invest based on rumors without careful analysis and research. FOMO in crypto is very dangerous for those who are active in digital currencies as investors. Because they may buy fake currencies and suffer huge losses to sell them. Investment should never be based on emotions.
What results does FOMO have?
It can be said that FOMO has both positive and negative consequences in the digital currency market. On the one hand, it will cause the growth of some currencies, and on the other hand, it will cause the loss of the capital of a large number of people. The digital currency market is full of people who are in a hurry to invest and buy currency. This will affect the growth of the market and since people invest hastily and without research, it will cause them to waste their capital and energy. As long as there is FOMO in cryptocurrency, there will be a lot of rumors, fake news and scams in this market.
How to control FOMO?
In order not to suffer from digital currency FOMO or to control it if you are suffering from it, we present methods below.
Do your own research on currencies
Do not blindly follow the behavior of the crowd, but refer to the information you get. In addition, use reliable sources that publish news related to digital currency investment. Get news about blockchain projects from its official channels and make the right decision by analyzing them. Check any information that doesn't seem right.
Usually, traders are biased about their currencies and talk positively about them. As long as you are gathering information, try to have a completely unbiased view. In the following, we provide a checklist that you should evaluate before making a decision.
- White paper
- Community activities
- Business position
- Development team
- Total supply
Be careful not to fall for scammers
Needless to say, scammers exploit people involved in cryptocurrency FOMO for their own purposes. Because they don't have the power of analysis and they have a lot of enthusiasm to invest in cryptocurrency while they don't have complete information about it. In this way, they are likely to be exploited by fraudsters again and again, and by the time they realize it is too late.
What are the risks of FOMO in crypto?
FOMO in digital currency can cause prices to rise by unusually fast percentages. This often leads to a dramatic price drop after the FOMO is overcome. This situation happened to Bitcoin in 2017; The price of the largest cryptocurrency reached nearly 20 thousand dollars in December 2017; The reason for this price increase was the news related to BTC futures. Shortly after that, the price of Bitcoin fell to around $11,000.
Therefore, people who invest solely based on FOMO, are exposed to significant losses when FOMO disappears. On the other hand, it is also worth noting that digital currencies constantly witness extreme fluctuations, and this has somehow become a symbol of this asset class.
Risks of FOMO in the digital currency
In this article, we tried to examine one of the most common emotions in the world of trading, especially digital currency trading, that is, FOMO. As you have noticed by reading the article, FOMO can be described in one sentence: the fear of losing something valuable and falling behind others. If you don’t want to experience FOMO in cryptocurrency, all you have to do is join Asiasignal’s VIP channel which will let you access awesome signals every day. Be the member of Asiasignal’s premium account of trading view right now without any doubt.