FOLO, Fear Of Losing, The New Emotion Driving Bitcoin Down
Youâve head of FOMO (fear of missing out) but now we want to propose a new concept, FOLO, the fear of losing, the specific emotion that looks to be accelerating this months market collapse.
Simply put, FOLO is a fear of losing assets, a fear of losing funds and a fear of losing money. FOLO exists in falling markets because crashing prices encourage investors to sell up on the premise that their portfolios are sinking. They need to sell fast in order to retain the maximum possible profit, otherwise they risk actually losing money, the worst nightmare for any investor.
FOLO is the polar opposite of FOMO. FOMO encourages investment, through this notion that investors might miss out on potentially huge profits as a result of failing to invest. FOMO drives, FOLO dumps.
It makes sense
Of course, itâs only natural for investors to sell up during crashing markets, indeed, this idea is justified on the basis that as it stands, the total market capitalisation of the crypto markets stands at $190 billion, down from around $800 billion as recorded in January, during the cryptocurrency boom according to Fortune.
Furthermore, according to Fortune, Samson Mow the Chief Strategy Officer at Blockstream Corp has said:
âMost cryptocurrencies have been overvalued for a very long time. Itâs hard to pin this move on any particular factor, but it feels like the opposite of last year when money piled in as people felt FOMO. Now itâs piling out as they sense panic.â
See more for yourself, here.
Itâs that panic, that we believe is driving this new FOLO concept.
The idea that this is the opposite of last year is important to consider, because it could help us predict what might happen next. In theory, as FOLO drives prices down, we could reach a point where FOMO kicks back in. Prices could be temptingly low, especially given that we have already seen Bitcoin hit $20,000.00 in the past, whoâs to say it wonât happen again?
In this instance, FOMO will begin to take hold and encourage a pump of investment into the markets, this will drive up prices and lead to a market surge. What will happen after this is an organic fall, a sell off and the return of FOLO. In theory at least.