When it comes to cryptocurrencies, the term “fear of missing out” (also known as “FOMO”) refers to both the sense of uneasiness and the notion that other people are participating in a pleasant or unique experience while you are not.
When do you get involved with FOMO?
In the context of trade, it refers to passing up a once-in-a-lifetime chance or a profitable investment. For example, if the value of an asset grows quickly or declines, it creates the possibility of making emotional judgments rather than logical ones. Essentially, it occurs whenever a new cryptocurrency joins the market.
What are the consequences of FOMO? Advantages that FOMO offers:
- Favourable opportunities for buying and selling.
- Providing useful recommendations for traders.
- Has the potential to promote interest in new cryptocurrencies.
Disadvantages that FOMO offers:
- The possibility to suffer a complete loss due to FOMO.
- The potential to encourage unreasonable transactions.
- Make irresponsible purchases and sales
What is the collision of FOMO on asset pieces?
When FOMO is established in an uncontrolled manner by the media and influential people, it will grow like bubbles. For example, if the price of one stock begins to rise and the price of several others also increases dramatically in a short period of time, this may result in FOMO. Then, in this circumstance, emotional transactions will emerge, the price will suffer an artificial increase, and, finally, liquidity will diminish, and prices will collapse.
The side effects of FOMO:
We may visualise significant anxiety and irrational trading as sides of the warning triangle, primarily affecting cryptocurrency values, especially when several traders trade massive amounts simultaneously.You read fomo article on MonoMoney site.