After Trump won the election, the price of Bitcoin soared, reaching $100,000 per coin.
Many investors are eager to try and begin to feel anxious that "if they don't buy now, they will miss it" - this is the "FOMO" (Fear of Missing Out) in investment psychology, that is, the fear of missing out.
On the 28th, Ben Carlson, an analyst at Ritholtz Wealth Management LLC, wrote an article titled (Is It Too Late to Buy Bitcoin?), arguing that many people are now eager to invest in Bitcoin, often because the price has risen sharply, and they are influenced by FOMO emotions, forming a mentality of blindly chasing the rise.
He suggests that investors, when considering cryptocurrencies, should ask themselves why they want to enter the market now, stay calm, make rational judgments, and not blindly follow the trend just because prices have risen.
"I can calculate the motion of celestial bodies, but not the madness of humans."
Recently, with Bitcoin's surge, investors, driven by FOMO emotions, have begun to doubt whether they missed out on this wave of price increase.
In this regard, Carlson states that investment decisions driven by blind following may carry significant risks, as warned by the experiences of many famous investors in history—even a scientific giant like Isaac Newton could not escape the emotional traps in investing.
In 1712, the stock of the South Sea Company in Britain surged in a short period. Mathematician, physicist, and astronomer Newton made a small profit on his first investment in South Sea Company stock, and after tasting success, he invested more until the bubble burst.
Ultimately, he lost between £10,000 and £20,000 in the South Sea Bubble, equivalent to about £20 million today. Newton felt deep regret at the time and once said:
"I can calculate the motion of celestial bodies, but not the madness of humans."
Newton's South Sea Company investment is not just a story of a financial bubble, but also reflects humanity's vulnerability when facing market emotions. In the centuries following Newton, similar situations have been commonplace, especially in the stock market, real estate, and other high-risk investment areas. Behind every market surge, there often lies an irrational bubble.
Stay calm, make rational judgments, and avoid letting FOMO dominate decisions.
Carlson points out that the rise in Bitcoin's price has attracted a lot of investor attention, but investors need to think rationally and examine their motives for entering the market. Many people are only now becoming interested in Bitcoin, often because the price has already surged significantly, leading to a blind chasing mentality.
Such behavior often traps investors in a vicious cycle of 'chasing highs and cutting losses.' The price of Bitcoin may continue to rise, but it may also crash due to market adjustments.
He believes that investing in high-risk assets like Bitcoin, while potentially yielding substantial returns, is equally fraught with uncertainty. Instead of relying on FOMO-driven impulsive decisions, it is better to adopt a rational and prudent strategy, unaffected by the short-term fluctuations of the market. After all, in history, many great investors have suffered unbearable losses precisely because they overly relied on emotions and short-term market trends.
For investors now considering investing in Bitcoin, Carlson issues a warning: if you are only now deciding to enter the market, it may simply be due to the price surge and FOMO mentality. This emotion-driven investment is often difficult to sustain.
