- FOMO and FUD 2023
What is FOMO and FUD
Beginning cryptocurrency investors and traders may see one problem in front of them: a lack of awareness of the subject of investing. Obviously, this factor is detrimental to success, but just as often people lose all of their funds for a more primitive reason, and that is emotion.
In this article we will look at two terms: FOMO (Fear Of Missing Out) and FUD (Fear, Uncertainty, and Doubt). These two phenomena often cause investors to lose at best some of their capital, and at worst to lose everything.
FOMO is foregone profits syndrome. The term is not tied to the crypto industry and appeared long before bitcoin, but it perfectly describes the emotions and behavior of a certain number of investors. If you are prone to FOMO syndrome, you rely not on analytics but on emotions: you sell coins at a cheap price for fear of further declines, or you buy a cryptocurrency at a high price for fear of missing out on further growth. As an example, we can also consider the simplest situation: an investor saw the tokens of one ICO increase in price by 100 times, but he did not participate in it. Now, this investor is worried about missing such a great opportunity and invests all of his money in a lot of projects without knowing anything about them. It is more likely that all of these projects will not meet expectations and the investor's capital will decrease many times over.
FUD stands for Fear, Uncertainty, and Doubt and is a psychological tactic used by news resources and marketers to create an opinion among the audience that the subject is incompetent. In the cryptocurrency industry, FUD has become incredibly widespread, with global media outlets throwing out unreliable news one after another, causing manipulated investors to sell assets out of fear and uncertainty. It is noteworthy that FUD is also used by cryptocurrency projects in advertising. Surely everyone has at least once noticed advertisements urging to buy tokens as soon as possible, otherwise, you will miss your chance to get rich.
- How to avoid FOMO and FUD?
Because both of these phenomena are emotion-based, they need to be controlled in the first place. When deciding to sell or buy an asset, ask yourself the question, "Based on what am I making this decision?" If the answer comes from fear, worrying about losing money or not making money - think a few more times about what your options are and choose the best one.
In the case of FUD, you have to analyze any incoming information. The cryptocurrency market reacts to negative news almost instantly, and the reason for that is simple - people don't understand the situation and start to dump assets. Even if it becomes known a few days later that the news was fake, the market will most likely not recover quickly.
In both cases, your biggest enemy is your own emotions, not outside factors. The chance of losing money is dramatically reduced if you analyze every buy, sell, and investment and evaluate all incoming information.