How to Avoid FOMO (Fear of Missing Out) in Crypto Investing
FOMO, or the fear of missing out, is common in the cryptocurrency investing industry. That being said, it can be very dangerous and lead to losses that are difficult to recover from, which is why most investors work to avoid it.
The best ways to avoid FOMO are to do your own research, always have a clear investing plan, and to remind yourself that something can be too good to be true. Read on to learn more about FOMO in crypto and how you can avoid it.
What is FOMO?
FOMO is an acronym that stands for “fear of missing out,” and it is a state of mind where someone makes decisions (and often invests) just because they are afraid that if they don’t, they will miss something.
FOMO is a state of mind, though it can also have physical symptoms such as anxiety, headaches, difficulty sleeping, and twitches. People suffering from FOMO may overconsume media (like social media and news) and make decisions that are out of character for themselves.
In general, FOMO is not dangerous if it happens once, but when issues persist, it can quickly lead to declining health, bankruptcy, and more.
Why is FOMO Bad?
FOMO is most dangerous because it clouds a person’s judgment, leading them to agree to things they normally wouldn’t if they were in their right mind. FOMO can also lead to an individual taking risks without thinking (or knowing) the true consequences. As we mentioned above, experiencing FOMO once isn’t always dangerous, but regularly feeling FOMO can lead to mistakes, especially in trading cryptocurrency.
Cryptocurrency traders experiencing FOMO will often invest in projects they don’t even like or believe in—just because they saw it on the news or in social media. It can also lead to them investing more money than they can spare, leaving them with an empty bag when a project goes defunct or is revealed to be a pump-and-dump scheme.
How to Avoid FOMO in Crypto
It can be difficult to avoid FOMO in trading spaces. As such, the tips we list below may not work for everyone, and you may need to use multiple to keep yourself from being pulled into the FOMO haze. If you have tried everything below and still struggle, it may be time to seek professional help.
1. Research
The number one way to avoid FOMO is to take the time to research a project before you invest. Typically, the true information behind the tech (beyond just the social media hype) can help you to realize that there is no true value to the project and you really were about to simply buy into the hype. In the same thread, if you can’t find any information behind the project, you’ll rest easier knowing you avoided buying into a scam.
2. Have a Clear Investing Plan
If research isn’t enough for you, we recommend taking the time to develop a clear investing plan of how much you will invest, and when. Then, when something new pops up on your feed, remind yourself you have a plan, and you are sticking to it. When you are really struggling, you can sit down with the plan (and nothing else) and remind yourself of your investing goals in the first place and how the plan you designed will get you there.
3. Remind Yourself That Things Can Be Too Good to Be True
It’s a difficult thought to master, but more often than not, there are things that are simply too good to be true. In fact, when it comes to cryptocurrency investing, the things you read or hear are too good to be true 90% of the time. Next time you hear something you are afraid to miss out on, remember that you’re likely not missing out on anything—as it’s probably too good to be true.
Remember, the most trusted investing strategy isn’t timing the market, but time in the market.
4. Only Follow Media You Trust
Unfortunately, social media is free to use, and a lot of companies will leverage it in any way possible—often posting facts that are exaggerated or straight-up untrue. We recommend unsubscribing from all social media except for the few companies you trust, and turning off ads if possible. If you can’t turn off ads, we recommend lowering your time online and subscribing to email updates from your favorite companies instead. This will ensure you get the news you need and none of the fake advertisements.
5. Remember, Scammers Love FOMO
Scammers know all about FOMO, and they utilize this condition to take advantage of you. With words like “invest before it’s too late” or “only three early investment spots left,” they convince you to invest before you have done your research. Remember, legitimate companies rarely require investments in the next 24 hours for you to be successful. For example, Bitcoin launched in 2009, and as long as you purchased before 2017, you would be rich right now. This means all investors had far more than 24 hours to consider and invest to reach success. So, if you see a company saying you have to invest now, without giving you time to think and research, it’s probably a scam, and you should run.
6. Learn From Previous Mistakes
We fully expect everyone to be caught in FOMO at some point during their investment journey—and that’s okay! Falling victim to FOMO will hopefully teach you how to better avoid it in the future. Just take a moment to categorize how you are feeling so next time you feel that you can know what is coming and avoid making the same mistakes.
Overall, FOMO is an annoying but common problem in cryptocurrency investing. It’s best avoided by always doing your research, having a plan, and avoiding media you don’t trust for your information. Above all else, remember if something sounds too good to be true, it probably is.
