These incidents are becoming more and more popular, with the founding of the Binance Smart Chain, where everyone can simply create a coin, with little effort. Especially after the hype with Doge and Shiba, the cryptocurrency scene was flooded with newbies that thought it's a get rich quick scheme, only to be proved wrong, shortly after. I even have acquaintances and friends of mine ask for advice, after purchasing some crap coins no one knows about, without any kind of research before proceeding.
Those sitting outside crypto world think that it's a shortcut of getting huge money in short interval of time but it proves to be wrong when they jump with lots of cash and becomes a victim of losing money in short duration of time. You are right people are missing key principle of investing which is DYOR.
The FOMO has made many to buy coins when they are at there ATH.
That shouldn't have mattered whether the Investors bought at ATH but I believe the problem people keep having is still not having or believing in Bitcoin even if there are investing in it. Imagine those how bought at the 2017 ATH but believe and were able to HODL to 2021 ATH, we all know what the result is. So the Issue is not even Investing what you can afford to lose cos no one wants to lose money even if you believe you can afford it but once they understand that there will be dips and recovery again, then you are good to go.