The Most Dangerous Thing in Crypto
The vast majority of people who are investing into cryptocurrency are doing it to hopefully make a substantial amount of money and also change their lives financially forever. That is a very reasonable thing for people to want to do. After all, personally I'm striving towards the same goal. I'm a huge fan of the technology and the potential change it could bring to the world, but I do largely view it as an investment as well. When you are investing into anything, you need to take it very seriously. After all, you work extremely hard to earn the money that you are hoping to invest. You should put just as much effort or care into investing it. By that, I mean that you shouldn't only invest into the most recent "hyped" coin of the moment. There is a danger that is unfortunately becoming far too common in the space. People are being preyed upon by influencers on places such as YouTube, Twitter, or others. They're told to be about this "secret" hidden gem coin that is definitely going to do a 100x. And then the rug is pulled out from them resulting in them losing their money.
This is a trend that I have seen happen over and over again in the cryptocurrency industry. More so than any other market. These influencers, that regular people look up to as knowledgable, or have great respect for; are secretly paid by the coin that they are shilling, and proclaim it as the next up and coming coin. Often being paid in that said coin. If not a coin, they are profiting from shilling referral links for a service. Because of their large audience size and the volatility of the crypto market, they are able to pump a coins price with their promotion. And then just as the coin is pumping while their followers are purchasing it, the influencers then sell and dump on all of their followers. Often resulting in the price of the coin dropping significantly and also their followers losing money.
It is a tale as old as time, especially in the cryptocurrency market. We have all seen those videos with the titles, "such and such coin will 100x." It safe to assume that any videos about small cap coins, hidden gems, or anything of the like; are most likely paid promotion videos. If you have that knowledge or keep that in mind while watching these videos, it is fine to watch them. After all, it is still somewhat a decent way to learn more about the crypto markets. But, the problem is that far too many people don't know that these videos are more often than not, paid promotions and their opinion is easily swayed. For some reason, they really trust their favorite influencer. Often thinking of them as a friend or guide. Not realizing that they are the product for these influencers. Everyone has their own biases, myself included. I often lean heavily towards bitcoin, and a few other large cap coins. Which also means that you should never take anything of what I say as 100% financial advice. With that said, I always strive to give my honest opinions and thoughts, even if they may be overly-bullish at times. Long ago I stopped including any referral links of any kind in my articles. Instead, if you appreciate the articles that I write, I would be thrilled if you would just follow me on twitter or write a comment.
I'm not sure why people are so trusting of these influencers in the crypto space. Perhaps it is because cryptocurrency is digital, and influencers are also digital and that connects both of them. Maybe YouTube videos just feel more intimate to us and feel like a family member is talking to us. Or perhaps, people see these meme coins, or extremely small caps going bonkers and going up sometimes by several thousands of percent. They see the influencers discussing these coins and the gains that they made from them and that if you want to make these gains you need to do the same. People want to make money as quickly as possible and want to do it as easily as possible too. This means that they like to be told what to invest in. As harsh as it may sound, many people lack the time or simply don't want to put in the time to obtain the knowledge they need to survive in this turbulent market.
What can you do?
Should you avoid influencers all-together? I don't think you need to. After all, there are things that can be learned by soaking up as much information as possible. Most would probably consider me somewhat of a bitcoin maxi by looking at my portfolio. A majority of the content I consume is often bitcoin related as well. But in-order to balance out my mindset, I make it a priority to also consume ethereum related content, and also altcoins or crypto in general. It's a great way to keep myself balanced and you should always strive to balance yourself as well. While watching a video or even reading an article. Think to yourself from their perspective. What might their bias be? What are they gaining from it? Don't obtain all of your information from one source, that could end badly for you. But obtain it from everywhere possible. The important thing to remember is that knowledge is power, and in the crypto market that could be the difference from surviving or losing all of your money. So go ahead and watch those YouTube videos, Twitter posts, news outlet articles, blog or newsletter articles, listening to podcasts, reading books, learning about the crypto terminology and basics, also go to official project sources and read further. In the crypto markets, it is often those who devote the most time that have the most success. Just always remember to be very careful and make your own decisions. Always do your own research before investing.
How about you? Have you ever been fooled by an influencer and bought a coin that they were promoting? What are your favorite ways to learn and improve your knowledge in crypto?
As always, thank you for reading!
