Fear of Missing Out (FOMO):

One of the strongest psychological factors that appears to influence crypto-trading is the fear of missing out (FOMO). This term is often used by some experienced traders and a style of thinking to avoid . (e.g., the belief that one could be missing a good bet), the opportunities for FOMO seem particularly intensified in crypto-trading. Traders are confronted with displays of hundreds of coins. Some of them, they already own; others they do not. If one which they have purchased is going up rapidly, they may regret having not made a larger investment. If another unpurchased coin is going up which they had previously considered, they feel annoyed for having missed out on the opportunity. Perhaps most problematically of all is the situation, when they observe a ‘green screen of numbers’. The market is going up and they feel compelled to be part of the action. They purchase a coin when it has reached a short-term peak, only to watch the price fall soon afterwards. FOMO also applies to sell decisions. When altcoins, in particular, have rapidly increased in price (e.g., 10X), there is always the prospect that the rise might continue. Instead of taking the profit, the person starts to dream of what they might purchase if the price increases 40X or 50X, but is then unprepared when the price falls 30–40% in single day when the bull-run ends.

FOMO is a construct that largely arose from social media research and this is reflected in its associated measure . In this sense, it is entirely appropriate to apply to crypto-trading given its strong presence in online social networks. Not only do individual traders or investors experience a FOMO in relation to their own actions, they are also exposed to testimonials from other traders on social media sites that may then encourage them to buy certain coins or to hang on to receive even larger gains.