Fear Of Missing Out (FOMO) is an acronym meaning “fear of missing out.” It relates to worry or the fear of missing out on a significant or unique experience that others are having. For example, when we watch our friends having fun without us, we all feel FOMO.
FOMO is a term used in the financial markets and trading to describe a trader or investor’s anxiety about missing out on a potentially lucrative investment or trading opportunity, especially when an asset’s value climbs dramatically in a short period.
Individuals and the market community as a whole may be prone to making market decisions based on emotion rather than logic and argument.
It is especially perilous for the haphazard retail investor since it can frequently result in overvalued assets, exposing the investor to far more significant financial risk. FOMO may be avoided by using indices and charts correctly and sticking to the fundamentals.
When the meme coin DOGE began rapidly gaining in value, many investors started selling their existing crypto and investing in DOGE out of fear of losing out, hence raising DOGE’s value indirectly. As a result, the price continued to rise until the bubble burst, as it usually always does when FOMO takes over the market.
