THE FEAR OF MISSING OUT (FOMO) FACTOR IN CRYPTOCURRENCY AND MEME STOCK MARKETS

Abstract

This study investigates the impact of Fear of Missing Out (FOMO) proxies on trading volume between 2015-2024. The impact of Social Media Activity (SMA), Herding Behaviour (HB), Online Community Engagement (OCE) and Google Search Intensity (GSI) on Trading Volume (TV) was the particular focus of the study. The research design was ex-post facto using annual secondary data from digital analytics and financial market databases. The data analysis was comprised of descriptive statistics, correlation analysis and Ordinary Least Squares Regression.methods.The Bounds test produced an F-statistic of 10.254 (p < 0.05), confirming the existence of a long-run relationship among the variables. The findings indicated that Social Media Activity exerts a positive and statistically significant effect on trading volume in both the short run (β = 0.535, p = 0.020) and the long run (β = 0.771, p = 0.0002). In contrast, Herding Behaviour, Online Community Engagement, and Google Search Intensity exhibited statistically insignificant effects on trading volume. Diagnostic tests further showed the absence of heteroskedasticity and serious serial correlation, confirming the robustness of the estimated model. The study concludes that social media activity is the most influential FOMO indicator driving trading volume during the study period. It therefore recommends that investors exercise caution when reacting to social media trends, while regulators should strengthen oversight of digital financial information to minimize speculative and irrational trading behaviour.