Have you felt the fear? If you are a regular crypto investor, follow Gold or the stock markets looking for good chances to realize some gains, then you probably know how painful and dominating FOMO can be.
One is very calm on an ordinary day. Maybe it’s tea time and everything seems normal. Suddenly, news is received from a friend, a new YouTube video or an amazing Telegram community is discovered. A new opportunity to earn a lot of money with this new coin! Perhaps a new blockchain that seems so much better than all the others and promises to change the world! Everyone is buying! The price rises parabolically! 2x, 3x, 5x! Only they have no coins. Help! They need to have this coin right now!
WHAT IS “FOMO”?
“To miss out” means losing a very valuable opportunity that other people already know about and are taking advantage of. Let’s say your neighborhood supermarket is giving away discount coupons for all its products. All your surrounding neighbors already have many coupons and are very happy because they can make their purchases with a 30% discount during the next three months. You still don’t have coupons. If you don’t arrive on time, then, you’ll have missed out.
For now, today it still seems that you have a little time. However, a horrible feeling of anxiety starts to consume you. This feeling invades your mind throughout the day. Suddenly, you can’t think of anything else. You cannot concentrate at work. Your whole body feels the degree of anxiety going up and up. Panic! Tomorrow ends the period to go to receive your coupons. Maybe today the coupons will go over. You have this intense fear of losing a huge chance. Your fear is what is commonly referred to as, “Fear of Missing Out”.
SOME EVOLUTIONARY PSYCHOLOGY: WHY DO HUMANS EXPERIMENT FOMO?
FOMO is a particular type of fear. Like other types of fear and panic, it is associated with our brains, with our amygdala and the need to survive. Fear has the power to take control of the mind and body. This may seem terrible. But, actually it is very useful because fear can make decisions much faster than our rational brain can in conditions where your it wouldn’t know what to do. FOMO helps you to finish your school years, so you don’t miss the opportunity and graduate with your friends.
IN WHAT SITUATIONS DOES FOMO PLAY A ROLE?
FOMO will help you and could even save you in certain times. Thanks to the mental experience of FOMO, your primitive brain often helps you make the right choice. It is as if your emotions are the pilot of your mind and your body in some cases. Emotions are extremely important. Emotional decisions sometimes are the right choice. Imagine a furious dog is chasing you. Fear can save you. FOMO saves you so you don’t leave your soccer team or miss out on the next party, and it helps you to not live alone at home without a job.
HOW DOES FOMO BIAS OUR BRAINS IN CRYPTO?
FOMO, however, is an emotion that can induce your brain towards brutally wrong investment decisions. How is this though? …didn’t we just say that emotions are good? Yes. Emotions are good. However, it is vital to learn how to handle our emotions and how much we should obey what they demand from us. Our emotions work as automatic and irrational responses. This can lead to fatal results. You could suddenly hit someone with a stone due to anger, or invest all your savings in the same asset because of FOMO. Strong emotions are always warning signs.
CAN FOMO LEAD YOU TO INVEST IN THE WRONG ASSETS?
Yes, absolutely. Never, by any chance, should we listen to our emotions when they scream too loudly “Buy now! Buy now!”. If one is nervous or a little desperate and has some strong belief that an asset is the great opportunity of the century, then something is very wrong. Yes, it is true that some investment opportunities could objectively be very good but an exaggerated feeling of urgency is not. Emotions can deceive our brain, take control and make us invest in garbage or in scams.
HOW CAN WE AVOID THE BAD EFFECTS OF FOMO?
One answer is to pursue the development of emotional intelligence in crypto investments. For example, one should learn to measure the degree of anxiety and urgency felt about a new asset. We must also learn to monitor the beliefs created in one’s own mind. A good investor should have a mental software installed in his brain that will help him detect these irrational beliefs that produce such voices of, “You will become a millionaire with this asset in three months!” or “This currency will change the world!” Educating the mind takes time, but it is essential.
THE GOOD AND THE BAD SIDE
The fear of being left behind is good in almost every way. The cases in which it can hurt, in reality, are not very many. In Neurology, it is said that all emotions are valuable and have great evolutionary and adaptive value. However, like everything else, they can also hurt. Let’s not fear FOMO. The fear of the “Fear of Missing Out” especially exists as a real problem in Crypto and it can drive you away from good opportunities. Crypto, as any other economic activity, is risky. One should be very careful to not make quick uninformed decisions.
Human beings go to work every day. Some human beings attend universities diligently. Other human beings comply with strict sports routines day-by-day. There are also people who spend many years building a business. Why? Because most of us believe that there are real chances that good things can happen, and we of course want them to happen to us. We believe that good things are real. We don’t want to miss out. FOMO can help a little in Crypto, but we must be mature enough to be keep it under control.