Slang is a distinct language that is spoken in an informal manner by members of a particular peer group. This language form is typically used by members of specific in-groups that prefer their personalized form of expression over the common lexicon of the standard language. The slang within a peer group is mostly used to both strengthen the group’s identity and exclude outsiders.
What Does FOMO Denote in Psychology?
FOMO is a popular acronym denoting “fear of missing out”. In psychology, this concept depicts a social media phenomenon that brings about adverse effects on the mental health of some people. Namely, by being constantly ‘fueled’ with the idea of perfection as represented via social media, some people feel as if they are missing out on something important.
This is mainly due to the fact that they cannot match the exaggerated representations of life, personality, or success that have been manufactured or inflated by some Internet influencers, traditional media, and social media as a whole with their own, real lives. The fear of missing out can be evident in all areas of life without exception, including trading, stock markets, investments, and other financial businesses.
What Does FOMO Denote in the Crypto Realm?
FOMO also applies to situations where assets are at stake.
Introduced in the crypto lingo by Patrick J. McGinnis in 2014, FOMO refers to a ‘decision paralysis’, i.e. a fear-driven unwillingness of a cryptocurrency investor to commit to a course of action in a situation when there are many options while holding the belief that a more beneficial alternative exists. In other words, financial market investors and traders on the cryptocurrency market become ridden with anxiety that they have to make a decision that they would otherwise not make if they didn’t fear missing out on a profitable opportunity.
A good example of this might be when a trader decides on a big buy when the price of crypto assets drops, or a sale when the price of a coin sharply rises and ‘goes to the moon’. Coins purchased during initial coin offerings (ICOs) are often sold at a profit once the coin first becomes available on the exchanges. This is attributed to the hype around the currency, which raises demand for it.
Most FOMO-affected crypto investors eventually do face losses. This is a result of their fear of a better option that forces them to invest in crypto assets at a highly inflated price, panicking that an offer could be forever out of their purchase power if they don’t take immediate action. This can put significant pressure on both the mental health of the trader and their capital.
The Origins of Cryptocurrency FOMO
In the world of investments, the fear of missing out has always been around. One of its major triggers consists of investment scams that have led many investors down a financial abyss, particularly in the cryptocurrency space. Related to the aforementioned, the term shill (also used as a verb “shilling”) refers to a cryptocurrency trader who actively promotes a cryptocurrency project or a digital coin with the purpose of gaining financial gain for themselves.
Shilling is generally performed to bring new cryptocurrency investors into the fold, thus promoting the coin or token purchasing and influencing the market price. Since these individuals often ‘shill’ a cryptocurrency for a certain amount of money, future investors are more likely to be involved in a scam. Because of this, potential investors should perform their own research into the cryptocurrency market rather than relying on information provided by others.
What Are the Warning Signs of FOMO in Crypto?
When an investor experiences the fear of missing out, there are several tell-tale signs that alert to this condition. In most cases, an investor that fears missing out displays:
- Insecurity in making decisions. In the case of a FOMO, the person is constantly lingering ‘in between’ solutions and is unable to bring a firm decision on an investment. This is a result of the anxiety triggered by the mixed expectation of striking a lucrative deal and the fear that this decision might leave the trader empty-handed.
- Refusing existing options. The investor refuses to accept the current options and lives under tension that they could miss a better option if they decide on an existing one.
- Fear of saying ‘no’. The word ‘maybe’ is a more acceptable expression for a trader with signs of FOMO, since it leaves them reassured that in this way they are able to change their mind and take advantage of a lucrative opportunity of an investment when it appears.
Why Is FOMO Considered a Negative Concept in the real of Cryptocurrency?
When it comes to cryptocurrency trading, fear of missing out may be extremely disastrous, as coin volatility can swiftly compound investor’s losses. Furthermore, the nagging FOMO ‘voice’ that constantly repeats something along the lines of: “I would have been a billionaire by now if I had bought that solitary coin for $100 last year!” in the trader’s mind can be a huge psychological burden.
According to the theory of FOMO, the investor’s idea of waiting for a return to their starting position and then profiting from a coin’s all-time high will ultimately result in the loss of their assets. When the traders fall prey to FOMO, they tend to engage in impulsive investments fueled by the fear of missing out on an opportunity that could possibly make them billionaires overnight.
The consequences of FOMO can bring forth some quite negative effects stemming from unreasonable investments and the great psychological pressure traders experience. FOMO can even influence the price of cryptocurrencies and the market cap if it affects a larger number of crypto traders simultaneously.
What Do FUD, HODL, and FOMO Have to Do With Bitcoin?
Often spread by social media networks, Fear, Uncertainty, and Doubt (FUD) can have a lot of clout on the price of a coin offered on the cryptocurrency market. Instead of trusting the official charts, traders are more often than not influenced by the negative information surrounding some coins, which is easily transmitted via mass media, Internet influencers, or large corporations. In turn, this negative information raises fear, uncertainty, and doubt in investors’ minds, despite the fact they are often based on simple rumors rather than the actual position of a coin in the cryptocurrency market.
In contrast to the negative rumors that give rise to FUD, the FOMO abbreviation refers to the personal belief that triggers a feeling of anxiety in the trader. In some cases, even an outside influence or advice is ineffective in changing the mind of a cryptocurrency investor who is afraid of missing out, due to the subjective nature of this phenomenon.
Furthermore, HODL or ‘‘hold on for dear life’ refers to long-term investment plans related to Bitcoin and other altcoins. This acronym originates from a misspelled word on a Bitcointalk forum that soon became a catchword for the blunder of novice traders.
Namely, newbies in the crypto world tend to lose or generate fewer assets than they would have if they had simply kept their currency instead of trading it. This term is also used for traders who are inexperienced with short-term trading strategies but seek exposure to the value of digital assets.
These behavioral concepts are frequently linked with Bitcoin traders since BTC is the most popular coin in the crypto trading world and is thus more prone to speculations.
A Few Words Before You Go…
Numerous peer groups are constantly developing new language forms to facilitate message sharing, particularly on the Internet. With all the hype that surrounds crypto, slang is expected to thrive even more in the still-developing cryptocurrency world. In this realm, for instance, FOMO refers to investors’ inclination to become stressed and begin amassing particular coins and tokens when the price of a cryptocurrency is rising, all out of fear that they will lose out on a lucrative opportunity.
By using these simple and memorable acronyms, cryptocurrency traders are able to easily recall the most essential trading rules. However, even if you are a newcomer in the world of crypto and have a hard time keeping up with the various crypto slangs, remember that the fear of missing out is unfounded and that every fresh start begins with a step into the unknown.
Finally, learning (be it new acronyms or how to trade crypto assets) is a process that can be highly rewarding (both figuratively and literally).
