Fear of Missing out (FOMO)

FOMO is the anxiety that an exciting or interesting event may currently be happening elsewhere, often aroused by posts seen on social media. In the context of financial markets, it is the fear that others are making significant profits on an asset while one is on the sidelines.

This drives investors to buy into assets at their peak, often ignoring fundamental value or risk. FOMO is a primary driver of speculative bubbles in the crypto market.

It causes traders to abandon their planned strategies and act on impulse, often resulting in buying at local tops and suffering immediate drawdowns. Managing FOMO requires a strong commitment to a trading plan and an understanding that there will always be new opportunities in the market.