The Motley Fool

Crypto FOMO: Are You Afraid of Missing Out?

Image source: Getty Images

Cryptocurrency’s rise has brought many benefits to its owners. Between massive gains, new business opportunities and a new community to participate in, it has rewarded its users handsomely. But for another class of investor, crypto has brought a less desirable outcome:

Fear of Missing Out (FOMO)

Thanks to the enormous gains crypto has made, many now feel like they need to buy it or else miss out on a once-in-a-lifetime opportunity. It’s not uncommon to hear people on social media expressing regret that they “missed the Bitcoin bull run,” or asking whether it’s “too late to get in.” The source of these kinds of sentiments is FOMO–the sense that something exciting is happening somewhere, and we’re not there. In this article I’ll explore the topic of FOMO and what can be done about it.

What is FOMO?

FOMO is a relatively new term, and the underlying phenomenon hasn’t been studied extensively. However, it has gotten some attention from research psychologists, who have described it as:

  • A form of anxiety.
  • A fear of being excluded.
  • “Affective forecasting.” That is, worry about the effects of events that haven’t happened yet.

Research suggests that FOMO is a type of anxiety related to fears of being left out of something. Which may help explain what’s going on with crypto. Crypto is as much a social phenomenon as a new type of currency. Crypto holders network on social media, and top crypto influencers can become very famous. Perhaps, then, it’s the fear of being seen as someone who “missed the boat” that really drives crypto FOMO, more than the fear of financial loss.

5 Stocks Under $49 (FREE REPORT)

Click here to gain access!

Uses in marketing

While FOMO is a new term, its use in advertising and marketing is as old as the hills. Advertisers have long used catch phrases implying that a potential customer will “miss out” if they don’t buy. An example is AT&T’s “don’t be left behind” campaign, which explicitly references the fear of being left out. Given that advertisers are willing to spend top dollar on this and other psychological tricks, it would be foolish to discount their effectiveness. In the next section, I’ll explore how to fight against FOMO if you feel yourself suffering from it.

How to fight against FOMO

Before going any further, I should say that if your FOMO is so extreme that it’s disrupting your life or keeping you awake at night, you should speak with a mental health professional. FOMO is considered to be at least partially linked to anxiety, and if it’s plaguing you non-stop, you may want to seek help from someone who treats anxiety disorders.

If that’s not the case, then you could consider allaying your FOMO by investing in crypto. Even if you don’t know the first thing about cryptocurrency, you can easily invest in it by buying ETFs like the Purpose Bitcoin ETF (TSX:BTCC.B). With these ETFs, you don’t need a wallet, a password, or any of that other stuff that crypto investors require. ETFs trade on the exchanges like stocks, so you can buy them easily.

They do involve some management fees. For example, Purpose’s fee is 1%. That will eat into your return somewhat; but on the flipside, you can hold BTCC.B in a TFSA, and avoid capital gains taxes–which isn’t easily done with Bitcoin itself. Overall, it’s a great publicly traded Bitcoin alternative that, if bought in small amounts, may help put your FOMO to rest while not exposing you to too much risk.

You'll never have to worry about missing out on these stocks:

Just Released! 5 Stocks Under $49 (FREE REPORT)

Motley Fool Canada's market-beating team has just released a brand-new FREE report revealing 5 "dirt cheap" stocks that you can buy today for under $49 a share.
Our team thinks these 5 stocks are critically undervalued, but more importantly, could potentially make Canadian investors who act quickly a fortune.
Don't miss out! Simply click the link below to grab your free copy and discover all 5 of these stocks now.

Claim your FREE 5-stock report now!

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Andrew Button has no position in any of the stocks mentioned.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss an important event.

Iain Butler and the Stock Advisor Canada team only publish their new “buy alerts” twice a month, and only to an exclusively small group.

This is your chance to get in early on what could prove to be very special investment advice.

Enter your email address below to get started now, and join the other thousands of Canadians who have already signed up for their chance to get the market-beating advice from Stock Advisor Canada.