Dinosaur Season - The Daily Gwei #242
The crypto markets never seem to change.
During a bull market the crypto ecosystem can be an incredibly crazy place and the markets can make little to no sense. We’ve all seen the scams and “shitcoins” pumping like crazy over the last few months and I’m sure you’ve all been as puzzled as I have about it so allow me to shed some light on it all.
Source: https://twitter.com/sassal0x/status/1390604453867307010
As you can see above, Robinhood has a very weird list of crypto-assets that they either support for trading or provide market data for. If we match these assets up with all of the top gainers over the last week, we get a pretty clear picture of who’s been buying these “dinosaur coins” (hint: retail investors). Now, the reason I call them “dinosaur coins” is because these coins were fan favorites during the 2017 bull market but most of them are essentially dead projects now. I remember things like NEO being touted as the “Ethereum of China” and people were very bullish about OmiseGO because its founder had an Apple sticker on his skateboard (yes, really). On top of that, coins like Ethereum Classic are the best (worst?) of both worlds - it’s a dead platform with little to no activity and newer investors are buying it because they believe it’s a “cheaper version of Ethereum”.
“Crypto” for most people really is just a bunch of marketing and narratives wrapped up in a coin ticker. People will browse through YouTube, TikTok, Facebook and other platforms trying to learn about this new ecosystem but inevitably fall prey to the extreme noise that these platforms are typically full of. So what ends up happening is most newer people simply buy some token you’ve never heard of on a centralized exchange and then wait for it to go up - completely blind to the actual use-cases and underlying technology backing it all up. Unfortunately, these people will also be the ones who end up losing a lot of money when the market eventually goes south.
To be totally honest, I don’t really think this is a big deal and it’s just one way that people are on-boarded into this ecosystem. I’m sure many of you started out like I did where it was the allure of making a “quick buck” that first got you interested in crypto. Though once the mania of the crypto bull market subsides we typically see a mass outflow of people who were just here to speculate and those that stick around usually go on to dive much deeper into the tech. Though I do believe that over time people will stick around regardless because crypto products will become so ubiquitous that they’ll be used in both bull and bear markets.
At the end of the day, I’m not here to moralize and tell people what they should or shouldn’t put their money into - we’re all adults here. Though it’s disheartening as an educator to see rampant scams and fake marketing spread so rapidly among so many people - it really does give the crypto ecosystem a bad look to the outside world (over the short-term, at least). Though it’s probably not a big deal because the internet started out in a similar way where it was full of scams and “criminal use” and well, the internet turned out just fine when all was said and done.
Have a great weekend everyone,
Anthony Sassano
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All information presented above is for educational purposes only and should not be taken as investment advice.