JOMO, short for the joy of missing out, is a concept that applies to cryptocurrency traders who choose not to follow the crowd. It serves as the opposite of FOMO, or fear of missing out, and acts as a counterbalance to price surges driven by hype and frenzy.
In the world of crypto trading, JOMO arises from the decision not to follow the herd, which is often wrong, and to avoid potential significant losses. For instance, during the 2020-2021 bull run in the Bitcoin market, many people were influenced by the frequent bullish calls and bought in at the peak, expecting further gains.
Various market commentators, including analysts at Standard Chartered and JPMorgan Chase, predicted in 2021 that Bitcoin’s price would hit $100,000 by the year’s end. The widely-followed stock-to-flow model further supported the bullish argument due to its historical accuracy during Bitcoin’s bull and bear cycles.
However, Bitcoin fell short of its popular $100,000 target and reached a peak of $69,000 in November 2021, marking a 60% decline. Consequently, those who practiced JOMO by either selling or abstaining from buying during the rally came out on top. Furthermore, they possessed the capital to enter the market at lower levels when FOMO was non-existent, like in June 2022, which marked Bitcoin’s most recent price bottom.
One of the few JOMO traders, Michael Gogol, did not succumb to the overly optimistic Bitcoin predictions in late 2021. He reduced his exposure to crypto a month before Bitcoin’s peak and expressed his relief in May 2022. On the other hand, another trader admitted to buying Bitcoin at $60,000 in October 2021 after being persuaded by the market’s anti-inflation narrative.
FOMO stems from the desire to make quick profits. Many traders believe they can double or triple their investments in a matter of days, weeks, or months by investing in cryptocurrencies. Typically, traders driven by FOMO engage in frequent trading without much thought or strategy. These high-risk trades can also have a negative impact on traders’ mental well-being, leading to stress and sleep deprivation.
To transform FOMO into JOMO, traders can follow these four steps:
1. Develop a trading plan.
2. Maintain a trading journal to track trading patterns.
3. Analyze potential trades using various metrics, including fundamental and technical analysis.
4. Disregard emotions, stick to the plan, and make adjustments accordingly.
It is important to note that this article does not provide investment advice or recommendations. Every investment and trading decision carries risks, and readers should conduct their own research before making any decisions.