4 Ways FOMO Is Driving The Crypto Coin Market
Posted On May 4, 2023
Reports from Bank of America indicate that $32. 3 billion dollars were funneled towards exchange-traded funds (ETF) in just one week in February this year. This is the largest inflow reported since 2002 into the coin market. Experts believe the excitement is as a result of the rising fear of missing out (FOMO) on the recently launched blockchain based ETFs.
Here are 4 ways FOMO is driving the crypto coin market:
1. The bigger picture
FOMO is not just driving the value of certain cryptos but all coins are benefiting. As the demand for cryptocurrencies rises, all coins in the coin market are benefiting from the avalanche of investors. This can be likened to the gold rush in the 1890s. In fact, some investors even refer to cryptocurrencies as digital gold.
2. Need for safe alternatives
Throughout history, people often became disillusioned by the hyperinflation affecting their currencies. Such disillusionment leads to people losing faith in their currencies. This phenomenon is contributing to the increased demand for cryptocurrencies in the coin market sector. People around the world see what has happened in countries like Zimbabwe and Venezuela and are therefore looking for a more stable alternative to their FIAT currencies.
3. SMART Contracts
Some digital currencies now offer smart contracts. A smart contract makes it possible for people to enter a contractual relationship without the need of a third party. A smart contract is typically done by writing a code in the digital currency that is triggered by a certain event. For instance, a payment can be triggered by a change in a stock price. The FOMO on such convenience is also driving the growing interest in the crypto coin market space.
4. Losing faith in FIAT currencies
All traditional currencies of the world derive their value from the faith people have in them. For instance, a dollar bill is just the same as a monopoly bill. The only difference between the two is the faith people have placed in the dollar bill. There is a general fear that the increasing adoption of digital currencies will cause this faith to dwindle. The result is a FOMO on the convenience of digital currencies.
Whether FOMO is artificial or natural is debatable. However, it is indisputable that this FOMO is driving the prices of digital currencies and interest in the crypto coin market through the roof. Recently, the value of Bitcoin increased by $1, 000 in just 15 minutes. As more people jump on board, the value of cryptos should continue to appreciate over time because of this increased interest and demand.