How does FOMO affect crypto markets?

Have you ever felt that pang of anxiety when you see your friends or acquaintances raking in profits from a particular cryptocurrency and you feel like you're missing out? That's FOMO, or Fear Of Missing Out, in action. And it's a powerful force that can drive up prices in crypto markets. But how does it actually work? FOMO often kicks in when a particular cryptocurrency starts to surge in value, and investors who missed out on the initial gains start to panic and rush to buy in. This buying pressure can drive prices even higher, creating a feedback loop that attracts even more investors. However, this surge in prices can also be unsustainable, as it's often fueled by speculative buying rather than underlying fundamentals. And when the music stops, those who bought in late can find themselves holding the bag. So, how does FOMO affect crypto markets? It can drive up prices in the short term, but it also creates a risky environment where investors may be more prone to making impulsive decisions. Ultimately, it's important to remember that investing in cryptocurrencies should be a well-researched and considered decision, not just a reaction to FOMO.