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Cryptocurrency investment: why FOMO is bad counsel

Cryptocurrency investment: why FOMO is bad counsel2 min read
  • February 20, 2023
  • by UH News

In this era of social media, it’s common for people to be pursued by the much-discussed “fear of missing out”, often abbreviated as FOMO. If something’s trending and everyone’s talking about it, it’s logical to want to be part of things, no matter what. It happens with films, fashion, series and the latest news. A simple example.can be seen in the trends on Twitter. Every event or occurrence that becomes a trending topic makes many users feel almost a necessity to share an opinion, even if they’re not very well informed on the subject. The launches of new Netflix or HBO series like Stranger Things or Game of Thrones, in particular, have achieved a popularity that transcends their respective streaming platforms, leading to much discussion on social media about what happened in a particular episode. This leads other users to watch the series just to avoid missing out on participating in the debate.

From FOMO to FUD

The phenomenon could also be observed upon the launch of BZRP’s Music Sessions #53 with Shakira. Not only did the brands mentioned in the lyrics make visual pieces to position themselves on social media, but many other companies urged their creative teams to jump on the trend.

But when it comes to finance, erratic emotions can cloud people’s decision making if they worry about “what people are saying” or “how other people are investing”. This abstract “other” inhabits the minds of many investors who want a quick win. If it’s said that now is the moment to invest in crypto, many will do so to avoid “missing the opportunity”, without conducting sufficient analysis or formulating a strategy. But in the crypto world, acting astutely and with adequate knowledge is essential.

This also means it’s important to avoid another phenomenon: fear, uncertainty and doub t, or FUD. This, in the financial world, describes practices that are deliberately aimed at generating a sense of confusion or alert among certain investors and financiers.

Growing interest and ways of investing

Despite the various crises suffered by cryptocurrencies in the last year, they remain a considerable opportunity for investors who want to transform their finances in an original and novel way. According to data from Google, “cryptocurrencies” was a major search term in 2022. Users most often asked the search engine what they are and how to invest in them, indicating that interest in crypto is rising.

But to avoid falling prey purely to the interest generated by FOMO, it’s important to know the advantages of investing in cryptocurrencies in depth. According to Yahoo Finance, what’s interesting about these digital currencies is that there are many different ways to invest.

These are three of the best-known strategies:

Holding : buying cryptocurrencies and keeping them for a period of time until their value has increased in order to sell them and generate a profit. This is one of the most conservative strategies.

Trading : buying and selling cryptocurrencies continually. This is more speculative since the profit generated depends on the value at which the currency is bought and sold.

Staking : putting digital currency into a fixed-rate deposit in order to generate interest on a daily basis.