Erik Weijers, 10 months ago
FOMO is the abbreviation for Fear Of Missing Out. Anyone who has ever had the feeling of "I need to buy this, now!" can relate. The feeling is not always an omen of a good investment or trade.
Because humans are herd animals, FOMO can kick in hard, especially when we see that the desired item is actually close to selling out. There is a run on the object because everyone is afraid of being late and missing out. That "object," by the way, can be anything: a concert ticket of a wildly popular band, but also an auction of a few bottles of wine from 1969 from a famous Chateau.
There is probably no market in the world where the feeling of FOMO is as strong as crypto - and within crypto perhaps the NFT market. The price of a coin suddenly skyrocketing, a mint of an NFT collection starting at 8 pm CET.... our breathing quickens. FOMO! Now!
As a basis for a good investment or trade, FOMO is often a bad advisor. Why do you get FOMO? Because you've heard the name of the coin or NFT in question buzzing around everywhere. That means the masses are already into it. If the masses are already into it, chances are slim that you still have an edge. After all, you make profits by getting ahead of the masses, not by making an impulse purchase that your neighbor is also making.
Take the period when the Bored Apes could be minted in the spring of 2021. There was no FOMO at all back then. You could buy one for 0.08 ETH. The price only started to rise in the following weeks and months.
The price of a coin after a long-awaited listing on a major exchange often makes crazy jumps - it is not uncommon to drop sharply again, after an initial spike. This is why more experienced traders often wait to take a position until emotions cool down and the price settles down. Unless they had already bought the coin in the pre-sale: in that case they use the fomo'ing investors as exit liquidity to sell! Buyer beware.
Although FOMO is widely used within crypto, it is not originally a crypto term. Unlike, for example, the illustrious HODL. (The article also lists other crypto terms).
However, there are synonyms of FOMO that apply particularly to crypto, such as 'aping' or 'to ape' (rushing into something like wild monkeys).
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