FOMO is a psychological syndrome referred to as following the crowd and fearing missing an opportunity. There is also this syndrome in crypto and securities. So let’s find out.
FOMO psychological syndrome is a condition that can cause you to constantly update social networks or shopping on trends, or even date someone just because you are affected by others’ opinions. The FOMO effect will make you see when you will follow the crowd.
What is FOMO Syndrome?
FOMO psychological syndrome (Fear Of Missing Out) refers to a fear of missing out on interesting things that others experience. The studies describe people with FOMO who worry that others may have more fun or experience better things than themself. This anxiety will make you always want to update your friends or other people’s activities, so you can see what they’re up to.
A post on Vinmec.com claimed that Dr. Dan Hernan (Israel marketing specialist) was the one who identified the effects of Fomo syndrome in early 1996 when he was researching with a number of clients. Dr. Dan Hernan obtained the results that FOMO syndrome can be one of the reasons why customers are not loyal to any one brand.
Having a fear of missing out, customers constantly buy new products from new brands not to miss any interesting trends.
What is FOMO in Crypto and Stocks
Since the fierce competition, the stock and crypto markets always make investors feel inferior to others. The more they compare themselves to others, the more they fear standing out of the game and becoming “old-fashioned”.
Consequently, they rushed to invest and uncontrollably follow the crowd, but the results were loss and failure. It is not a surprise since their emotions dominate all actions, and they are no longer alert enough to deal with sudden market changes.
For example, the XYZ stock is receiving great attention from investors. Many people begin to worry that they may miss out on a huge profit opportunity if they do not invest. Some immediately buy this stock even though the price has already reached its peak. However, the price of XYZ stock suddenly dropped rapidly, there were no buyers, and investors sold out in panic and suffered serious losses.
Reasons why investors are easily influenced by FOMO
Fear of missing opportunities
It’s the main cause of FOMO in stock investment. The obsession with success will make investors lose control, their decisions and actions also deviate from their original intentions.
Although the stock that they are holding increased sharply, investors continued to buy a lot because they did not want to miss the next rally. Even if the profit is at the initial expectation, they still have no intention of selling. As a result, they did not have time to react when the stock dropped suddenly and lost everything in an instant.
Lack of market knowledge and follow the crowd
Most newbies entering the market do not have much knowledge and experience. They try to learn from their predecessors and go to the exchange a lot to get used to this environment.
But remember, knowing someone who knows me is a hundred battles a hundred wins. FOMO pitfalls are always present, so only a thorough understanding of the market can protect investors from potential risks from FOMO.
Setting market expectations too high
Unrealistic market expectations are a significant reason causing FOMO. For increasing stocks or coins or NFT games, for example, investors often think that it will continue to increase for a long time, there is no chance to have a loss, and they can’t miss the chance.
Of course, the market has never been so easily manipulated. Therefore, a satisfactory result is hard to get, and the investors only become prey in the market.
Overconfident or self-deprecating
Overconfidence leads to self-satisfaction, and thus investors may overlook important movements on the exchange. Many people want to prove themselves, affirm that they are not inferior to others, but have to suffer a bitter ending.
On the other hand, investors should not be too self-deprecating. People who have low self-esteem are most easily controlled by FOMO when they do not have enough courage and strong will to stick to the plan.
Desire to win
Investors can achieve certain results, but that doesn’t mean anything if they want to win big. Then, when they fail, they may collapse and desperately try to regain the lost money.
With the post about FOMO Syndrome and the causes of crypto FOMO, I hope the reader and investor read the above content carefully and find it useful!