Blockchain and the fear of missing out

Have you ever noticed that nowadays, when something is labelled as “new” it gets forgotten even quicker than previous innovations? There is a reason for that and it’s quite simple. The speed at which new technologies, medicine and theories come up is better than any time in the past. Therefore, the gap between two different innovations is significantly shorter. You’d probably see multiple advances in technology within a year, so that leaves very little time to enjoy something while it lasts.

The blockchain is an exception to this phenomenon. You see, the industry that the Blockchain was developed for, is extremely slow moving. The financial industry, which had not seen innovations after the internet was first created, jumped at the opportunity to trade new assets. A testimony to this is when the word Bitcoin became known to pretty much everybody in 2017. The crypto boom soon followed.

The traders were bored

Traders who were engaged in the traditional financial markets had already figured out the tactics of trading on these markets, therefore something new had to be implemented. The biggest effort was the welcoming bonus offerings from Forex brokers, in order to “spice up” the trading industry once more. But it did no good as most traders were familiar with the asset.

Therefore, when they found out that there was a possibility to trade a new asset, and it was extremely profitable they leapt on the opportunity.
Why the hecklers were not effective

When there is a hot new topic on the block, there are always people who reject it, call it useless and avoid it as much as possible. However, there are those who try to influence others to do the same. They’re usually called hecklers, but in most cases, these people were famous and distinguished economic experts.
The arguments they were making, about Bitcoin not being backed by anything, that it was just a hyped up bubble, was mostly true. But what they didn’t manage to foresee was the extent of that hype and the peer pressure that came with it.

When something is still rather new and untested, people tend to struggle with the adaptation. But Bitcoin was completely different. Tech-savvy investors quickly saw the value in the asset and invested early on. Only after seeing these people succeed did others join in. Another factor to this was the peer pressure and the fear of missing out.
In most cases, we’d see people saying the following: “If I invest now I may regret it, but if I don’t I may regret that as well, so might as well invest”.

Same can be applied now

After the recent spike in crypto prices, we can see a similar sentiment from the investors. The moment people saw the prices going up, the fear of missing out could be seen. That is what most likely influenced the spike over the course of a couple of days. Seeing those who invested early, sparked some jealousy in others, further driving the bull.

But, just like in the past, the bull has been suspended to some degree, and we can see another frozen market for the foreseeable future.