FOMO “the fear of missing out”

Have you been glued to the news about crypto assets in the last few days and are you trying to find out what is going to happen to yours? We are the same. We are not fortune-tellers, and no one can predict what will happen in the future, but one thing is certain: educating yourself and making informed decisions in times like these is essential to ensure that you are well prepared for what may come.

If you’ve recently started investing and are facing your first phase of extreme market volatility, your emotions can be a rollercoaster ride: on the one hand, you’re bombarded with messages about extreme fear of losing money, and on the other, For another, you can’t avoid FOMO (fear of missing out) on an investment opportunity. Regardless, these types of events can be a very difficult time for investors, both newbies and veterans, and you’ll need to figure out the best way to get through these turbulent times.

Regardless of which side you find yourself on, there are a number of universal realities of these kinds of market events that are important to keep in mind. Without further ado, here are five tried and trusted approaches to ease your journey through the choppy waves of volatility.

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1. Know volatility, your investment partner

Don’t hide: learn as much as you can about volatility. The term “volatility” originates from the Latin word volatiles, which means ‘something that flies, fast or fleeting’. In the world of finance, volatility is a measure of the intensity of price fluctuations over a given period of time. The term volatility is also used to indicate the risk or uncertainty associated with changes in the price of an asset. Therefore, high volatility can cause drastic fluctuations in the price of an asset.

During high volatility, an asset’s price spikes and falls sharply again, sometimes within minutes, while times of low volatility are characterized by much more stable price developments. New traders may perceive increased risk only at times of high volatility, while experienced traders may view it as a greater opportunity for profit.

Some of the factors that influence volatility are geopolitical developments, major political events, central bank decisions, changes in interest rates, anything that has a major impact on supply or demand, and more. Volatility is an essential element of investing. If there is no volatility, there is no movement, and therefore there will be no real possibility of profit.

As you can see, volatility is a complex issue, and it is neither “good” nor “bad”. Volatility is a phenomenon that is an integral part of the financial markets and will be your investment companion to some extent wherever you go, so it is worth educating yourself on the subject of volatility in depth.

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2. Keep an eye on Dr. Greed and Mr. Fear

We are all human and therefore probably none of us is completely immune from experiencing feelings of greed and fear. The chaos in the crypto-asset markets could lead investors to panic sell when prices drop or blindly rush into buying an asset without doing their research first as FOMO arises. So, first and foremost, always keep in mind that rushing into any type of investment decision on a whim can have significant consequences on your assets. How can you keep your emotions in check when the markets go crazy?

Remember your investment strategy. As tempting as it may be, don’t stray from the long-term strategy you’ve set and don’t make spontaneous decisions fueled by FOMO. Don’t act right away either. After receiving a piece of news or information that upsets you emotionally in any way, take some time to let it settle, evaluate it rationally, and figure out what it means for your personal investment journey. Stick to your plan or at least reassess it before making buy or sell decisions based on someone else’s tweets (we’re talking about you, Elon), emotion, or the euphoria of the moment.

Don’t forget: the more confident you feel in your skills and knowledge on any subject, the more likely you are to make rational and well-informed decisions.

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3. Investing is for everyone: discover what works for you

Thanks to the digitization of finance, investing is increasingly open to everyone, anytime, anywhere. It doesn’t matter if you’ve decided you’re into all things crypto and DeFi (are you staking yet ?) or prefer precious metals, or stock * just what you want; If you’re into this for the long haul, setting up a savings plan for your favorite assets on Bitpanda starting at €25 per month takes the stress out of market timing and helps smooth market volatility in the long run.

Love your financial health: Apart from scheduling regular dates on your calendar to make sure you keep your assets safe, periodically review your risk tolerance, what currently influences it and why. The better your financial habits, the more comfortable you will feel on your investment journey.

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4. Diversification is your friend

Make sure your portfolio, the set of assets you invest in, is made up of a wide variety of different asset types. This strategy is known as portfolio diversification and it will help you sleep better at night because you will be able to rest easier in the event that one or a few of your holdings hit a rough patch.

The old adage of not putting “all your eggs in one basket” is also important for investors, as different assets can perform better or worse in different market scenarios. So, if the volatility of the markets is making you lose your nerve, why not take this time to learn about the different types of assets that you could consider adding to your portfolio in the future? A great way to diversify your crypto asset portfolio is Bitpanda Crypto Indices to invests in the entire crypto market with a single click.

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5. Keep calm and breathe

And then there are those moments when you feel really overwhelmed and like you can’t do anything. Don’t forget this: nothing, really nothing, lasts forever. Stay focused, make yourself a cup of tea and explore the world of crypto assets.

Keep in mind at all times that it is up to you how you invest and what decisions you make: you should never invest more than you can afford to lose. Check the price trends of your favorite cryptocurrencies, stocks *, ETFs * and precious metals on Bitpanda’s app for iOS and Android, and start your investment journey here.

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