If you are a regular reader of Short Squeez, you know that we have written about FOMO investing before. On June 10th, we introduced the FOMO economy and only two weeks later, we talked about how crypto was losing its FOMO appeal. That alone should tell you how fast the world of crypto changes. Well, guess what? Cryptocurrencies are hitting all time highs again.
Ben Carlson talks about the 3 levels of FOMO in his A Wealth of Common Sense blog:
1) Long-term FOMO: Missing out on investing on a well performing stock over a few decades. "I need to find the next dividend compounding machine."
2) Level 2. IPO FOMO: Amazon is the ultimate example of a company you wish you would have bought when it went public and just held on for the ride. "I need to find the next world-changing company."
3) Get Rich Overnight FOMO: This is being driven by the massive wealth being created in crypto. Solana is up 11.4K% over the last year. While Shiba Inu is up 71.0M% over the same time period. Someone really just turned $8,000 into nearly $6 billion by “investing” in a meme coin of a dog that is a derivative of another dog meme coin. It took a little over a year. "I need to find the next shitcoin."
Short Squeez Takeaway: Crypto has minted many new millionaires (some billionaires) over the last couple of years. FOMO from this cycle is bound to mess with people's brains in ways we cannot even comprehend right now. What makes FOMO worse is how easy it is to flex your wins on social media these days. No one posts pictures of them holding the bag, it's only pictures that turn $8k into $6 billion that go viral. Next time you try to buy Shiba Inu, pls be ready to lose it all over the next 24 hours.