FOMO

Definition ∞ FOMO, or Fear Of Missing Out, describes an emotional state characterized by anxiety that a desirable event, experience, or opportunity might be missed by not participating. In financial markets, this sentiment often compels individuals to make hasty investment decisions based on perceived rapid gains. It can lead to irrational behavior and speculative trading. This psychological factor influences market dynamics.
Context ∞ FOMO frequently drives speculative buying in cryptocurrency markets, particularly during periods of rapid price appreciation. News outlets often report on how this sentiment contributes to market volatility and asset bubbles. Understanding FOMO helps investors recognize potential psychological biases affecting their digital asset decisions.