Bitcoin kissing $104,000. Ethereum breaking out. The Crypto Fear and Greed Index showing a giant, honkin’ “Greed” indicator. That’s enough to get anyone’s blood pumping, in it’s exciting right? Particularly when you’re reading headlines of some dude making millions overnight from a couple hundred bucks. But hang on—let’s pump the brakes here for just a moment. Are we really being smart about it? Or are we being duped by the siren song of easy money, turning us into Pavlov’s crypto dogs, salivating at the sound of crypto’s bell?

FOMO: The Siren Song Of Crypto

We've all felt it. That sense of FOMO—that fear of missing out or that feeling that everybody else is getting wealthy and you’re not. It’s FOMO – the Fear Of Missing Out. This insatiable beast feeds on our psychoses while tempting us with the promises of Lambos and FIRE.

Think about it. Meanwhile, you watch Bitcoin taking off, driven by announcements of a trade agreement with the UK. (Yup, a trade deal! Who would have thought that international commerce could inflate crypto this much?) Ethereum is going to the moon baby! All of a sudden, your cousin Vinny, who still can’t figure out how to send an email, has become a crypto expert. The pressure mounts. You start thinking, "Maybe this is it. Maybe this is my chance."

FOMO is a liar. It distorts your perception of risk and exaggerates upside. It causes you to unlearn everything that you knew about smart investing—or should have known.

I'm reminded of my friend, Sarah. She invested her entire life savings into an obscure meme coin last year based on nothing but the recommendation from a single Reddit comment. She was on top of the world for a week, celebrating and posting screenshots of her “gains” on Instagram. Then, the rug got pulled. Poof. Gone. She lost almost everything. Now, she's working two jobs to recover. Her story isn't unique. It’s less of a cautionary tale and more a cautionary tale carved into the historical flammable rug of crypto.

Anchoring Bias & The $100K Mirage

Here's another cognitive trap we often fall into: anchoring bias. We get fixated on that artificial number, be it $100,000 or as of now $104,000. We treat it as a baseline, even though it’s entirely arbitrary. We start thinking, "If it hit $100K once, it can do it again!"

We all know that past performance is not indicative of future results. (You’ve heard that one before, haven’t you? Not just lawyer speak, it’s actually the immutable truth of investing!) That $100K peak? It's in the rearview mirror. The market conditions that shot Bitcoin to that peak might be gone too.

Let's not forget the confirmation bias. We all salivate at any news that confirms our bias and tells us that Bitcoin is absolutely going to the moon! At the same time, we ignore at our own peril the volatility and regulatory uncertainty that haunts cryptocurrency. Santiment are on the money – this bullish sentiment is a double-edged sword. Warning doublespeak. Too many calls for ever-ascending prices are the sure precursor to a crash.

We’ve watched this play out during the dot-com boom. This was a time when people really, truly, thought that the internet was going to change everything. They threw money at anything with .com at the end of it, believing the recipe for success was already built in. The result? The Great Recession, a financial calamity that destroyed wealth and opportunities—particularly in communities of color—and marked a generation.

Are You An Investor, Or A Gambler?

Let's be brutally honest with ourselves. Do you own Bitcoin or Ethereum simply because you’re supportive of the underlying technology and think these cryptocurrencies have a long-term future? Or are you simply in it to grab a fast buck, looking to get rich quick?

An effective investor conducts due diligence, knows what they’re getting into, spreads their risk among various assets, and thinks long-term. A gambler takes their chances, goes all in on the roulette wheel, and wishes for luck.

Recently Ethereum’s open interest surged by 20%. Simultaneously, Bitcoin’s interest has cooled a bit, reflecting the intricate dance of market forces at play. Maybe part of the rally is a result of legitimate excitement about Ethereum’s technology. It’s the absolute dollar amount of short positions liquidated ($800 million!) that signals the presence of a massive amount of panicked traders getting squeezed. That’s not a healthy, sustainable market signal. That’s the kind of idea borne out of fear masquerading as greed.

Ultimately, the decision is yours. But before you jump on the crypto bandwagon, take a deep breath and ask yourself: Is your greed clouding your judgment? So the question is, are you trying to make smart strategic decisions, or are you simply in pursuit of a fantasy?

Keep in mind that real riches is not a get rich fast scheme. It’s about empowerment and creating a financial future that’s safe — just one smart choice at a time. And that begins with fortifying your emotional state and making data-driven, non-emotional decisions, including when the whole world is flipping out.

So, what should you do?

  • Do your own research. Don't rely on Reddit threads or your cousin Vinny's "hot tips."
  • Understand the risks. Crypto is volatile. You could lose everything.
  • Diversify your portfolio. Don't put all your eggs in one basket (especially a digital basket).
  • Have a long-term strategy. Don't try to get rich quick. It rarely works.
  • Control your emotions. Don't let FOMO or greed cloud your judgment.
  • Consider seeking professional advice. A financial advisor can help you make informed decisions based on your individual circumstances.

Ultimately, the decision is yours. But before you jump on the crypto bandwagon, take a deep breath and ask yourself: Is your greed clouding your judgment? Are you making rational decisions, or are you just chasing a mirage?

Remember, true wealth isn't about getting rich quick. It's about building a secure financial future, one sensible decision at a time. And that starts with controlling your emotions and making rational choices, even when everyone else is losing their heads.