The story
Michael watched a small crypto token climb 180% in three days.
At first, he ignored it.
Then his X feed exploded. Everyone seemed to be making money. Traders posted screenshots of five-figure profits. Influencers predicted another 10x.
Michael started feeling uncomfortable.
“What if this is the opportunity I’ve been waiting for? What if I’m the only one who misses it?”
He bought $8,000 worth of tokens.
Within hours, the rally stalled. Early buyers started taking profits. The price collapsed.
Michael didn’t buy because he believed the token was worth $8,000.
He bought because he couldn’t bear watching other people get rich without him.
And that was precisely the moment he became someone else’s exit liquidity.
The psychology behind it
FOMO — Fear of Missing Out — is the anxiety that others are experiencing rewarding opportunities from which you’re excluded.
In crypto, three forces make it particularly powerful:
- Social comparison: Other people’s visible profits make your own progress feel inadequate.
- Urgency: Rapid price movements create the illusion that you must act immediately.
- Herd behavior: Seeing many people make the same decision can feel like evidence that the decision is correct.
Together, these forces can override your investment strategy and turn an emotional reaction into an impulsive trade.
The cruel irony? The more you fear missing the opportunity, the easier it becomes to ignore the risks.
The practical takeaway
Before buying a rapidly rising token, ask yourself:
“Would I still want this investment if nobody on social media were talking about it?”
If the answer is no, you’re probably responding to social pressure rather than a well-reasoned investment thesis.
And remember: the market will always produce another opportunity.
You don’t need to catch every rocket. You need to avoid boarding the ones that are about to crash.
— The Behavioral Investor — Understand yourself.
