FOMO in Digital Assets

The fear of missing out on cryptocurrency and stock investments: Direct and indirect effects of financial literacy and risk tolerance

“…Similar associations between FoMO and personality have been investigated with small associations between FoMO and Big-5 personality traits (Rozgonjuk et al 2021). 8 FoMO sentiment is argued as a motivator for ICOs as perceived scarcity creates an incentive to purchase so as not to miss out on the investment opportunity (Karkkainen 2022). Personality differences are argued to be common across crypto and stock investors (e.g., openness) given "higher FoMO scores of investors (Bitcoin and share) compared to those of noninvestors indicate that the former are more sensitive to rewarding experiences than the latter" (Kim et al 2020, 7).…”

“…Relative to the already large FoMO literature, as evidenced by three recent meta-analyses (Akbari et al 2021;Fioravanti et al 2021;Zhang et al 2021), research on FoMO in an investment context is small. Available literature suggests higher FoMO among crypto and stock owners versus non-investors (Kim et al 2020), a mediating role for FoMO on "dark Tetrad" personality traits for crypto attitudes and crypto intentions (Martin et al 2022), and a positive role of FoMO in initial coin offerings (ICOs) (Karkkainen 2022). Few papers consider the role of FoMO in stock investing though some consider the role of FoMO in aspects of stock investment or investing generally Gupta and Shrivastava 2021;Narula et al 2020).…”

Happier than Ever

“…Twitter was used "to signal effort, quality, and trustworthiness" of blockchain ventures to investors (Albrecht et al, 2020), although the fate of ICOs after they had been funded is not discussed in this study. Trust in ICOs was found to be driven by a rather complex sentiment of "fear of missing out" (FOMO) later (Karkkainen, 2021, see also Chapter 9 in this volume). In the future studies, one might surmise that a similar picture concerning NFTs will emerge.…”

“…This increased public attention was driven by a particular type of positive fear, or FOMO ("fear of missing out"). New and emerging research suggests that FOMO is one of the most important factors for getting into cryptocurrency trading (Delfabbro et al, 2021) as well as novel and increasingly risky projects such as ICOs (Karkkainen, 2021)-Tatja Kärkkäinen even describes FOMO as a particular type of investor's sentiment (see Chapter 9 of this volume). Even though cryptocurrency trading had a very eventful and rather rough 2021, the general public seems to have become much more interested in individual investment opportunities, or at least become aware of them, ever since the GameStop short squeeze in January 2021 (see van Kerckhoven & O'Dubhghaill, 2021 for a detailed timeline)-and some might say that such opportunities are rarely connected to any kind of fundamental value in the real world (see, e.g., Umar et al, 2021a;Libich & Lenten, 2021).…”