FOMO in Crypto stands for ” Fear Of Missing Out !”
It’s natural for a human to feel FOMO when they see the value of something going up or some other event occurring which makes them want to be a part of it. In some cases, people may buy into a coin (or digital asset) just because everybody else is buying into it. This makes the coin/asset go up in value further along with creating FOMO within others.
I believe that this kind of FOMO leads to what we call “The Greater Fool Theory,” which is a theory describing a situation where somebody purchases an item not because they plan on using it, but they purchase it for resale so that they can make a profit from the transaction. In many cases, people who follow this strategy end up losing money as nobody ends up buying the item from them.
In terms of cryptocurrencies, if people purchase a coin/asset because of FOMO and the price goes up, they will probably sell it for a profit if they believe that the trend is going to continue. If it does keep going upwards there can be a snowball effect, which is what creates these huge price movements in the market.
Due to this snowball effect, many people will be selling their coins/assets for a profit and since there are more sellers than buyers at any given time (especially on exchanges), the coin/asset can start trending downwards.
Does this mean that I’m against FOMO in crypto?
No, it’s kind of the opposite. If you are investing in crypto assets for the long term (which is what I recommend) then you should be doing your research and taking advantage of all opportunities in the market, which includes looking at FOMO situations.
What are FUD and HODL?
FUD and HODL is a common misspelling of the word “fear” or “hold”.
What HODL means in crypto?
The word ‘HODL’ is a meme in the cryptocurrency community, which refers to holding onto your coins rather than selling them.
What is FUD in crypto talk?
FUD stands for fear, uncertainty, and doubt. It is an acronym used to describe the fears among investors which cause them to sell assets so that they can avoid the loss or secure gains.