FOHO replaces FOMO as bear market tightens grip

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PayPal welcomed a new chief financial officer last week with a pep talk that sounded rather like a mantra or credo: “The work we are doing together has never been more important,” CEO Dan Schulman wrote.

The market isn’t so sure. PayPal’s stock price has lost 76% of its value in the past year and Venmo’s owner trades at levels last seen five years ago. The market has vaporized about $275 billion worth of Paypal value.

Why did the market miscalculate so badly? What we have here is a classic case of fear of missing out, or FOMO. The acronym, coined in 2004, describes the impulse that inflated the value of startups, SPACs, cryptocurrencies and even older brands like PayPal. 

FOMO’s dance partner in the last few years was TINA, which stood for “there is no alternative.” With interest rates near zero, cash yielded nothing and bonds yielded next to nothing, making stocks the only logical investment. 

TINA was preceded by NINJA, a term of subprime-lending art for “no income, no job or assets.” And more recently there is HODL, “hold on for dear life,” which sums up the Bitcoin fever in four letters and is a mantra enthusiastic holders have adopted as they cope with drastic pricing swings. 

For the bear market of 2022, our new acronym is FOHO.

“We have moved from fear of missing out to fear of holding on,” Peter Tchir, head of macro strategy at Academy Securities, wrote in a report last week.

FOHO, it rolls off the tongue like SoHo.

Most SoHo residents afflicted with FOHO can take care of themselves. But over its 13-year run the bull market reached deep into the middle class. A study Pew Research last year showed that Black, Hispanic and Asian investors were more likely to have speculated in crypto than white investors. Bitcoin has lost two-thirds of its value since November.

In 2021, 95 million Americans had accounts at one of the seven largest brokerage firms, according to The Economist, up from 59 million two years before. The new kids on the block came late to the party, like their ancestors in 1928, 1986 and 1999. By 2020 everyone knew someone who couldn’t stop talking about Bitcoin. 

Donald Trump owes his rise at least in part to the public’s disappointment with the Obama administration for declining to prosecute the business leaders whose recklessness led the country into the Great Recession. One imagines the Biden administration will handle things differently. 

Officials might take a look at the brewing crisis at Celsius Network. The crypto lender that offered customers 18% yields froze withdrawals last week, depriving those with FOHO of exercising the power to take their lumps and move on. In a new statement Sunday, Celsius said no one will see their money any time soon and the Hoboken, N.J.-based firm is silencing itself on Twitter so it can “focus on navigating these unprecedented challenges.” 

The acronym for that, of course, is FONTUC.