$100,000 Bitcoin: Unstoppable FOMO

Author: Wall Street Journal

On the 28th, Ben Carlson, an analyst at Ritholtz Wealth Management LLC, wrote an article titled "Is It Too Late to Buy Bitcoin?", arguing that many people are now eager to invest in Bitcoin, often because the price has risen sharply, and they are influenced by FOMO emotions, forming a mentality of blindly chasing the rise.

He suggested that when investors consider cryptocurrencies, they should ask themselves why they want to enter the market now, stay calm, make rational judgments, and not blindly follow the trend just because the price has risen.

"I can calculate the movement of celestial bodies, but I can't calculate human madness"

Bitcoin has skyrocketed recently, and investors, driven by FOMO emotions, have begun to doubt whether they have missed this wave of rising prices.

In this regard, Carlson said that blindly following the trend of investment decisions may bring huge risks, as the experiences of many famous investors in history have warned - even a generation of scientific giants like Isaac Newton failed to escape the emotional trap in investment.

In 1712, the stock of the British South Sea Company skyrocketed in a short period of time. Mathematician, physicist and astronomer Newton made a small profit on his first investment in the South Sea Company's stock. After tasting the sweetness, he invested more money again until the bubble burst.

In the end, he lost 10,000 to 20,000 pounds in the South Sea Bubble, which is about 20 million pounds today. Newton was deeply regretful at the time and once said:

"I can calculate the movement of celestial bodies, but I cannot calculate the madness of human beings."

Newton's South Sea Company investment is not only a story of financial bubbles, but also reflects the vulnerability of human beings in the face of market sentiment. In the centuries after Newton, similar situations are common, especially in the stock market, real estate and other high-risk investment fields. Behind every market surge, there is often an irrational bubble.

Keep calm, make rational judgments, and avoid FOMO psychology to dominate decision-making

Carlson pointed out that the rise in Bitcoin prices has attracted the attention of a large number of investors, but investors need to think rationally and examine their motivations for entering the market. Many people are only now interested in Bitcoin, often because the price has risen sharply, forming a blind pursuit of rising prices.

This behavior often puts investors into a vicious cycle of "chasing up and killing down". The price of Bitcoin may continue to rise, but it may also plummet due to market adjustments.

He believes that investing in high-risk assets such as Bitcoin may bring rich returns, but it is also full of uncertainty. Instead of relying on impulsive decisions driven by FOMO, it is better to adopt a rational and stable strategy and not be swayed by short-term market fluctuations. After all, many great investors in history have suffered unbearable losses because of their over-reliance on emotions and short-term market trends.

For investors who are considering investing in Bitcoin now, Carlson warns: If you decide to enter the market now, it may only be due to the skyrocketing prices and FOMO psychology. This kind of emotion-driven investment is often difficult to sustain.