Bitcoin Surged up 131% this year, partly due to optimism about a favourable U.S. regulatory environment under the new administration. Smaller tokens like Dogecoin have skyrocketed (up 296%), driven by speculative trading rather than fundamentals. Crypto markets often move on investor speculation, not on concrete value indicators, making them highly volatile.
How to Handle Crypto Investing FOMO
- Acknowledge Your Emotions:
- Recognize feelings of excitement or curiosity when you see others profiting from crypto.
- It’s okay to feel left out, but don’t let emotions dictate your financial decisions.
- Invest vs. Speculate:
- Investing: Requires thorough analysis (e.g., earnings, debt) for long-term gains.
- Speculating: Often based on price trends and hype, with little underlying data to support decisions.
- Risk Management:
- Determine how much you’re willing to lose without derailing your financial goals.
- Allocate only a small percentage of your portfolio (single digits) to speculative crypto assets.
- Avoid risking significant sums like inheritances or entire paychecks.
Crypto investing can be exciting, but it’s crucial to approach it with a disciplined, informed mindset. If you decide to dabble in speculative trades, treat it as a high-risk gamble, not a guaranteed wealth-building strategy. Focus on a diversified portfolio and long-term financial health over chasing quick gains.
