Bitcoin, the largest and most popular cryptocurrency, has surged 131% this year, fueled in part by investors' optimism that an incoming presidential administration will create a more favorable regulatory environment for crypto. However, cryptocurrency prices, particularly for smaller coins, are driven primarily by speculation rather than fundamental factors like corporate earnings, making them highly volatile.
This volatility can trigger what behavioral finance experts call 'regret aversion' or 'FOMO' — the fear of missing out on potential gains. Amos Nadler, founder of When it comes to missing out on investments,'It's OK to feel bad,' he says.'It's better to feel bad than to let FOMO to drive you to do something stupid.' Cryptocurrency, with its rapid short-term gains and internet appeal, can be particularly enticing to investors seeking easy riches. Nadler cautions that this perception of simplicity can be dangerous when dealing with a highly volatile asset. It's crucial to approach cryptocurrency investments with caution and avoid making impulsive decisions driven by FOMO