There’s a new alpha in town, and it goes by the name of Bitcoin.
While much of the financial world, quite rightly, remains preoccupied with the well-known, established narratives, some investors have been quietly riding the wave of Bitcoin’s staggering ascent this year, a rise that has gone unnoticed by the masses.
The crypto space is buzzing with excitement as Bitcoin flaunts an impressive 112% surge in the last 10 months.
Imagine the mass hype, the frenzy and global headlines if this were another asset, say gold, for example.
But guess what? Most retail investors are still blissfully ignorant of the gains. However, there’s an impending FOMO (fear of missing out) storm about to hit.
Let’s take a moment to acknowledge the unsung hero of the financial markets – Bitcoin, the rebel with a cause, the digital maverick that’s been flipping traditional investment norms the bird.
While Wall Street pundits have been busy analysing stock charts and bond yields, Bitcoin has been orchestrating a symphony of gains that few outside the crypto space have even bothered to tune into.
Year-to-date, Bitcoin is up 112.75%. In comparison, on Wall Street, the S&P 500 is up only 13.97%, the Dow Jones 2.79% ,and the Nasdaq 29.76%. Meanwhile, in London, the FTSE is down 0.45% over the same period.
Bitcoin’s meteoric rise has been one of the best-kept secrets of the financial world, a secret that most retail investors are yet to stumble upon. But make no mistake – a wave of FOMO is gathering momentum, and when it crashes onto the shores of the crypto space, it’s going to be a game-changer.
As whispers of Bitcoin’s triumph begin to grow louder, especially with next year’s halving event, and the now almost inevitable approval by the US financial regulator of a Bitcoin ETF, I sense the wider investor community is beginning to feel the ground shift beneath them.
The herd mentality, inherent in FOMO, I believe is going to kick in as investors witness their peers and influencers benefiting from Bitcoin’s bullish momentum.
This fear of missing out on potential profits will become a driving factor, triggering a surge in demand for Bitcoin. This increased demand, coupled with the finite supply of Bitcoin capped at 21 million, will inevitably push prices higher.
Moreover, FOMO tends to amplify market movements, creating a self-reinforcing cycle. As more investors rush to join the Bitcoin bandwagon, the increased buying pressure will drive up prices, further intensifying FOMO among those who have yet to make their move. This positive feedback loop could result in rapid and substantial price increases.
In essence, FOMO acts as a catalyst, accelerating the adoption and acceptance of Bitcoin as a mainstream asset. The fear of missing out on potential gains will not only drive retail investors to enter the market but may also attract institutional investors seeking to capitalise on the growing momentum.
With such huge gains in a relatively short period of time, there will, inevitably be a level of profit-taking, but this all by itself is likely to also fuel The Fear.
As FOMO takes centre stage, the price of Bitcoin is poised to experience a surge, marking a pivotal moment in its journey towards broader recognition and acceptance in the global financial system.
Nigel Green, deVere Group CEO and founder