FOMO!

FOMO is the "fear of missing out." Sometimes, like right now, that fear is more like terror. Those overpowering emotions make it almost impossible to resist the urge to chase whatever you want to buy. For me missing out on Bitcoin’s insane rise is terrifying. Big name hedge fund managers Paul Tudor Jones and Stan Druckenmiller are both touting Bitcoin. Former hedge fund manager and creator of Real Vision Raoul Pal thinks Bitcoin will hit $1 million in five years and many others are saying it will reach anywhere between $100,000 and $300,000 in 2021. Big companies such as PayPal and Square are buying up Bitcoin as they move to enable their clients to trade the cryptocurrency.

Is crypto “real” this time? Whether it is or isn’t the fact remains there has been a huge bull move in an asset and I am not currently in on it. I watch Bitcoin and several other cryptos just to stay on top of what they’re doing. I could see the opportunity unfolding this fall. But I did not buy in. Now I fear the train has left the station and I won’t be able to get on.

This fear often leads traders to buy regardless of price, regardless of value, or regardless of how extended the price may be from a decent buy point. But this is the dreadful mistake you must avoid. Hark back to 2017 when Bitcoin last traded near $20,000. All those latecomers got stuck holding the bag while the price of Bitcoin dropped all the way down under $5,000. If they sold, they lost money. If they held on they are only now getting near breakeven. It is essential to fight your fears and urges and wait for the price to set up again. It will. How can I be so sure? Because it has happened with every sharp market move throughout history. At some point Bitcoin will take a rest; its price will drop; some form of consolidation of all these recent gains will occur; and then, it will break out yet again. That is what I’m waiting for. The only real question is: Can I wait? Can you?