photo from Freepik.com
Cryptocurrencies have opened the door to new incredible financial opportunities, attracting investors from all over the world. Unsurprisingly, many jump on the crypto bandwagon only because they want to catch up with the herd and without knowing what this industry is really about. The truth is that cryptocurrency is more complicated than it seems – beyond the price charts, the world of digital assets is highly influenced by human emotion.
The crypto industry is volatile, and not even the most reputable assets make an exception: ethereum price goes through massive fluctuations, and the same is true for Bitcoin. Although investing in crypto seems like a numerical game at first, it is more like a rollercoaster because the possibility of a bull run can be a two-edged sword, creating enthusiasm while also fueling FOMO. This is why you must approach crypto investments carefully, and cope effectively with that dreadful anxiety of missing out on the biggest return.
What is FOMO, anyway?
FOMO, the acronym for fear of missing out, makes you feel like other people are living their best lives while you’re being left behind. Although the concept has been around for centuries, it has become more common due to social media. When scrolling on Instagram, for example, someone may feel like everyone else is doing better than them.
But it’s worth noting that FOMO goes beyond social media: it is also prevalent in the financial landscape. When a coin’s value increases, investors can get caught in the hype and feel like they will miss out on a one-in-a lifetime opportunity if they don’t buy at that time, so they rush into making decisions just because they are scared. News flash: that’s often not the case. In reality, FOMO does more bad than good almost all the time, causing investors to lose their precious money.
Why FOMO isn’t your friend when it comes to crypto investing
From a larger perspective, FOMO leads to anxiety and depression and lowers your self-esteem. So, unsurprisingly, it doesn’t have a positive impact on your investing journey either. FOMO clouds your judgment, and if you don’t learn to control it, you will likely end up wasting your money, and your journey through the crypto world will be nothing but disastrous.
Let us tell you a harsh truth: that hot crypto that everyone chases at aa specific time could eventually decline in price – that’s simply how things work in the crypto market. Prices skyrocket and drop in a short amount of time. This is why the best approach you could take is to keep a long-term-perspective and follow a rational path, where you only make decisions based on a strategic plan.
Navigating FOMO: Best tips to help you overcome anxiety related to your investments
It’s easy to get all hyped up about a digital asset everyone talks about. After all, if it really goes to the moon, you want to be there to take advantage of it, right? That’s what it may seem, but it’s important to remember that crypto is based on speculation, and the price of an asset could go down just as fast as it goes up.
If the market turns tables and you rush into buying quickly only because you are panicked..well, it’s just a matter of time until regrets consume you and you lose a substantial amount of your capital. Luckily, you can prevent this if you don’t let FOMO control you and practice patience. Let’s take a look at what you can do to prevent FOMO from interfering with your investments.
Research, research, research
We can’t overstate this enough: research is your greatest tool when investing in cryptocurrency because it will prevent you from choosing projects just because someone says you should do so. By researching a specific asset, you will ensure you understand it and only buy it if you find it appropriate.
Make sure to educate yourself from reliable sources, such as educational blogs about cryptocurrency, trustworthy social media and YouTube channels, crypto newsletters, books, podcasts and webinars, and courses.
Consider your purpose for investing
It doesn’t make sense to have money just for the sake of it, does it? When looking to earn money, you likely do it for a reason: perhaps you want to make a big purchase, such as a home or a car, or maybe plan for retirement.
Hence, before buying a coin, reflect on your reason for doing it. Or, otherwise said, make a list of your short-term and long-term financial goals. Consider whether you’d be okay if there were a big price swig – is it worth taking such a significant risk for your objective? If yes, remember to stick to a plan and stay focused on what you want to accomplish whenever FOMO arises.
Don’t check prices obsessively
Sitting in front of the screen all the time to watch the price swings of crypto won’t help your investments. In fact, this can harm your mental health too, so it’s best to go do other things you like instead of constantly examining the market, and use crypto bots for that purpose.
Fortunately, many automated trading tools have been created, so take advantage of them. They can do all the job for you, analyzing market data, executing trading strategies and helping maximize your returns while also mitigating risk effectively.
Focus on portfolio diversification
If there’s one rule you’ll always come across when it comes to investing in crypto, it’s to never put all your capital in a single coin. Instead, hold different digital assets, as this will ensure your investment won’t be entirely wiped out in case a specific crypto drops considerably.
Portfolio diversification allows you to profit from the crypto market without exposing yourself to considerable risk. Besides, it could make your investing journey much more enjoyable as you will learn about multiple assets and their developments.
The bottom line
As you navigate the complex world of cryptocurrency, there’s one thing you need to remember always: behind all the big wins you see online, there are also a lot of losses – big ones. So, instead of chasing fleeting returns, stick to your long-term strategy and don’t pay attention to the noise in the market.
