The Trap of The Crypto Religion

Hello everyone warmly today I would like to describe a little bit about the topic of faith in various crypto projects how much you need to be careful not to fall into the trap of religion of various cryptocurrency projects.

Why should we be wary of such communities? how we can take advantage of cryptocurrency sects, and how much we should not rely on faith in invectives — today in our article.

How to identify a cryptocurrency sect?

We often see in the crypto world on Twitter or on youtube or other social media a very strong emotional approach to various cryptocurrency projects. Emotions, as we all know, are not necessarily our friends when it comes to investments, taming emotions is the most important element to be able to start making money on the crypto market at all — without taming emotions we are not able to be investors, because emotions determine our movements on the market.

Emotions create our world, it is emotions that create the value of some goods, asset and even money. It is We the People who create a certain value by virtue of the fact that if the whole society sees a value in something, then it really has a value, and it is an established value — and isn’t this also emotions? Haven’t we just used emotions to give value to something?

Most often the gurus try to play on our emotions

Yes it’s true Most often gurus try to play on our emotions, create slogans like “the train is running away”, “if not now then when?”, “don’t let the opportunity run away”, “don’t you really want to be a millionaire?”, “Bitcoin used to cost $1 too”. — yes these slogans in truth often have incredible power, and are hard to undermine, but… is they the right?

There are many projects where much has been promised. Miracles on a stick that were never fulfilled, or if they were — it was too late. In crypto and beyond, faith and promises have more value than technology which often annoys me, but that’s how it works and I’m not going to fight it. Today, the biggest tool of any project is marketing, and in truth, marketing is the key to any project’s success. Of course, technology is also very important, but who knows about technology there? it takes too much time to understand it, and in the end it always matters anyway how a couple of gurus from various social media advertise a project.

Those who already have some reach and their readers or listeners perceive them as some kind of idol have incredible opportunities to create and control the market — more than some people think. Influencers are the tool for choosing the direction of the market, of course, their actions are not always effective and often give a mediocre effect on a macro scale, but if a large influencer promotes a small project, there is a good chance that the project will make not a little percentage.

Gurus at the top of some cryptocurrency sects most likely want to tell you that the train is running out, that you are probably missing out on the opportunity of a lifetime blah blah blah — and believe me that’s not always true (although it can always happen). But the longer you are on the market, the more you understand that the market is one big line, where the greatest role is played by chance (black swans), but as you know, sometimes luck needs help and that’s what sects are for, to create self-fulfilling prophecies.

The crypto prophet

It is always the case that in an organization, a company or in general, even in politics or in life, we need some kind of leader, in the crypto world it is also visible. I spent many hours on various telegram groups of various cryptocurrency projects, on various reddit, facebook groups where practically any criticism of the project around which the environment is focused ended up being kicked out of the group, or simply banned. Any unfavorable question usually ends in a ban, and unfortunately, rarely an answer to a given question — faith counts there, not technology or facts.

However, the best thing happens on twitter there, most often when there is euphoria when a project is growing, the environment around it, with gurus at the forefront, they even fap what the project is not wonderful and how they were wrong only … worse when the project does not grow or it just falls — then the strong bans of active critics fly in the hope that it will spread to the bones. The ego of these gurus of cryptocurrency projects is so high that Mount Everest is just a hill. These people most often play the role of those who know more than others, that they learned some special algorithm that allowed them to understand the market differently, and believe me that is not the case, they are just trying to create a self-fulfilling prophecy using the effect of scale.

I’m not going to point fingers at what projects in the crypto world work in a similar way. Which projects have their gurus at the forefront, but I think each of us has met a project where emotions play the majority of roles, and technology is really just an addition, not the main foundation — and it is technology that should play the main role.

The self-fulfilling prophecies

In financial markets, the term “self-fulfilling prophecy” often appears, alluding to the potential for beliefs and expectations to lead to anticipated outcomes. In the world of cryptocurrencies and trading, these prophecies play an essential role in shaping the market dynamics.

Understanding Self-Fulfilling Prophecies

A self-fulfilling prophecy is a prediction that brings about its own realization. In the context of the financial markets, it means the expectations of traders and investors directly influence the market trends they forecast. This phenomenon stems from a psychological perspective known as behavioral finance, which studies the impact of psychological factors on economic participants and the subsequent effects on the markets.

Self-Fulfilling Prophecies in Cryptocurrencies

Cryptocurrencies, with their decentralized nature and largely speculative value, are heavily influenced by the self-fulfilling prophecy phenomenon. One of the most prominent examples is the impact of market sentiment on cryptocurrency prices. When a significant number of individuals believe a particular cryptocurrency’s value will increase, they tend to invest, causing demand to surge, and consequently, the price rises, turning the expectation into a reality.

However, it’s crucial to note that self-fulfilling prophecies in the crypto world can drive both upward and downward trends. Negative sentiment or predictions of a price decrease can cause investors to sell off their holdings, resulting in increased supply, decreased demand, and ultimately, a drop in price, again realizing the prophecy.

The Role of Media and Influencers

The media and influential figures often have a substantial role in shaping these self-fulfilling prophecies. News stories or social media posts can significantly sway investor sentiment.

A famous example is the “Elon Musk effect”, where tweets from the entrepreneur have caused notable shifts in cryptocurrency prices, most notably Bitcoin and Dogecoin.

Self-Fulfilling Prophecies in Trading and Market Analysis

In trading, particularly in technical analysis, self-fulfilling prophecies are quite common. Traders who follow patterns, such as support and resistance levels or trend lines, essentially contribute to these patterns’ effectiveness.

For instance, if a significant number of traders decide to buy a cryptocurrency when it hits a known support level, their collective actions can contribute to the price bouncing back, validating the anticipated support.

Risks and Considerations

While self-fulfilling prophecies play a role in shaping market dynamics, they can also contribute to market volatility and irrational behavior. This influence is especially true in the crypto market, where prices can swing dramatically based on sentiment and speculation.

Moreover, it’s crucial to realize that these prophecies are not foolproof predictors of future market behavior. Other factors, such as regulatory news, technological developments, and macroeconomic indicators, can also significantly impact market trends.

In conclusion, understanding the concept of self-fulfilling prophecies can provide valuable insight into market dynamics and investor behavior. However, they should not be the sole basis for making investment decisions. A balanced approach that considers multiple factors and includes diligent risk management is key to successful trading and investing in the crypto market.

Trusting Yourself: Why Skepticism and Self-Education Are Key in Cryptocurrency Investment

In the rapidly evolving world of cryptocurrency, it’s all too easy to be swayed by so-called “crypto gurus” claiming to have inside knowledge or foolproof strategies. As exciting as these promises may sound, the truth of successful crypto investment lies in skeptical analysis, continuous education, and an understanding of broader economic principles.

The Fallacy of Crypto Gurus

The volatility and relatively nascent stage of the cryptocurrency market create a fertile ground for various individuals claiming to be “gurus” or “experts”. While it’s true that some people have made significant gains in crypto investment, no one has a foolproof strategy for success. The market’s speculative nature means predictions can be wrong as often as they are right.

Relying solely on these self-proclaimed gurus could lead to investment decisions based on incomplete or inaccurate information, and could even expose you to potential scams. Remember, if something sounds too good to be true, it probably is.

Importance of Personal Analysis

When it comes to investing in cryptocurrencies, doing your due diligence is paramount. You should strive to understand the underlying technology of the cryptocurrency you’re interested in, its use case, the problem it’s trying to solve, the team behind it, and its growth potential. Look at the whitepaper, examine the roadmap, and don’t shy away from asking tough questions.

This kind of personal analysis allows you to make informed decisions based on solid research rather than relying on hearsay or following the herd. Remember, the value of any cryptocurrency should be driven by its inherent worth and potential for adoption, not just speculative interest.

Continuous Education: Crypto and Beyond

To effectively navigate the complex world of cryptocurrency, you need to continually educate yourself, not just about specific coins or technologies, but also about broader financial and economic principles. Understanding factors such as market cycles, supply and demand dynamics, inflation rates, and geopolitical events can provide valuable context and aid in making sound investment decisions.

There are numerous resources available, from online courses and books to podcasts and seminars, that can help you deepen your understanding of these concepts.

Skepticism as a Virtue

A healthy dose of skepticism can be a powerful tool in your investment arsenal. Always ask questions, challenge assumptions, and never take information at face value. Be wary of hype and learn to distinguish between valuable insight and mere noise. Even if information comes from a trusted source, it’s essential to verify it independently.

Seeking Answers

A curious mind is one of the most significant assets in cryptocurrency investing. Never stop asking questions, and always seek answers. Crypto communities on platforms like Reddit, Twitter, or various forums can be great places to start discussions and learn from others’ experiences. However, remember to apply your judgment and skepticism even when interacting with these communities.

In the thrilling and challenging world of cryptocurrency investment, self-reliance, continuous education, skepticism, and a broad understanding of economic principles are your most reliable guides. So, don’t just trust the “crypto gurus”, trust yourself and your ability to learn, analyze, and make informed decisions.