Bitcoin Investors: Is FOMO Being Replaced With FUD For Crypto Traders?
Many pundits believe that the crash of Bitcoin is imminent, and the crash is expected to be caused by Mt. Gox. This is because Mt. Gox is expected to unpack a big chunk of Bitcoin as well as Bitcoin Cash, a situation which will most likely thump the market, thus bringing the crypto to its knees.
The crypto space has coined and drafted an innovative vocabulary, one which is worthy of the Millennial generation who are proficient in embracing virtual assets as an alternative to the outdated ‘fiat’. For many people in the world today, fiat still is a new word known to just a few.
Unfortunately, this is a contemptuous perspective which looks at government currencies and says its trash. Of course, fiat currency is not garbage, this is because you cannot purchase everything with bitcoin, but you can with hard cash. Another perspective into the whole scenario is FOMO, ‘fear of missing out’.
The Bitcoin fizz was fueled by colossal levels of ‘FOMO’. Some virtual assets such as Ether, Bitcoin and Litecoin have made huge amounts of money to so many people within a short time. As a result, millions of people wanted to take part in the revolution, and this resulted in fueling the bubble.
Consequently, the market rose and people who had embraced the idea early enough were all smiles. Other people saw the market going vertical and were all apprehensive. On the other hand, another set of investors saw the vertical chart and cashed out their virtual assets. This was the best thing to do at the time, unless an individual sold his at $8, $320, or $3000 a bitcoin.
Hodl is what an individual needs to do. This is due to the fact that it will still be essential for you to purchase and hold, even as your glamorous virtual asset becomes worthless in your hands. Luckily, it may all turn good, only that you may have to wait for a couple of years.
Then there is the moon. This is an occurrence whereby a virtual asset moves from nothing to a very high price. For instance, you can purchase 10,000 Ether for a couple of thousands of dollars, and hold for few years. After which, the value will be in millions of dollars. All of us hope for the moon phenomenon and some have come by such happy fortunes by realizing the potential resident in the virtual assets.
Mooning Takes Place
The price of Bitcoin went from one dollar to $20,000. That of Apple shot from a couple of cents a share to a market cap worth trillions of dollars. On the other hand, Ether shot from almost nothing to a point where it was being sold for $1,200. The percentages definitely do not make any fiscal logic.
In this way, if you get FOMO, you may invest your fiat into an old virtual asset, which most likely would be the one you prefer. Unfortunately, you may end up Hodling the worthless results of your rash decisions for a long time. However, this is just FUD.
Fear, Uncertainty And Doubt
There is an old promotion technique where companies would throw their competitors off the scent as well as clients off purchasing the competitor’s products or services. In most cases, one of the reasons why there is usually a fall in prices is FUD. On the other hand, a key reason why prices always rise is FOMO.
For many naïve Millennials, they want nothing to do with the FUD, they prefer to Hodl, believing that the prices will soon go to the moon. Though it might happen, it is however worth noting that all abbreviations will not make it happen.
At the moment, FUD says the release of thousands of bitcoins, which are worth billions of dollars will lead to a crash of the crypto’s price. Well, some people hope it happens, so they can purchase it when the price goes down. Some investors are also waiting for the crash because one billion dollars’ worth of bitcoin will evaporate within a couple of weeks of selling.
This is because in any business day, $2 or $3 billion worth of bitcoin are transacted. So when Mt. Gox finally releases the thousands of bitcoins, one can imagine the frenzy it will result into. It should however be understood that the flow of the virtual asset may not be a fantasy, since it will be visible on the blockchain. Huge sums of money are moved all over the world, some are through doubtful crypto exchanges or otherwise.
Presently, over 80% of all bitcoins are mined and by around mid-2020, the number of new supplies will be halved. Irrespective of an individual’s viewpoint, bitcoin is largely a solid deflationary currency. It is therefore not wise for us to hold the ‘virtual gold’ nickname against it. Being an international currency, its acceptance has increased thus making it a huge brand.
However, the shortcomings are crystal clear. This is because the virtual asset is devoid of concrete safety. With an army of delinquents trying all they can to hack systems and steal the virtual asset from anywhere they can, there needs to be a solution to its security systems. In the past couple of weeks, Bitcoin has held up quite well. It is however difficult to imagine that its final capitulation has not taken place.