Hi y’all.This post will be dedicated to getting yourself informed. Information is king when you are investing. There is always more than meets the eye, and it is time to lift the curtain a bit. In my last post, I talked about FOMO (Fear Of Missing Out) and that this causes people to get burned. Another way how people get ‘rekt’ is by being ill informed or not informed at all. I mean, how many times do you see comments of people on Reddit or Telegram showing that they do not have a clue about what they are investing in. Please do not be that guy.
When investing you should, first of all, get yourself informed. So read a white-paper, see what milestones have been reached, find out more about the team and see what the circulation supply and market cap is. These are just the basics, but for some this is already too much of an effort. Next up is joining the Reddit, Slack and Telegram channels of a chain. Please read between the lines because a lot of gossip, FUD (Fear Uncertainty and Doubt) and FOMO (Fear Of Missing Out) is posted in these channels. And yeah, it sometimes gets to much with all the Moon, Lambo and Sharting memes. But at least you lol’ed.
As you can see, there are a lot of sources of information you can easily tap into. There are also a lot of ‘less obvious’ sources of info. For instance, do a Google Trends search to find out more about popularity and geographic interest of a chain. But like the title says, there is always more. So lets dig a bit deeper..
The CocaCola Kid
Sometimes, all it takes is an odd source of info. This is where it gets interesting, fun and weird. If I told you that sometimes you can get investment info on 4chan, you would probably ask me what I have been smoking (“Epa.. estas fumando una lumpia??”).
Let me give you an example. If you are investing in VeChain you probably have heard about someone with the nickname: ‘The Coca Cola Kid’. This guy always posts cryptic messages on 4chan when something is about to happen with VeChain. The message itself is always open for interpretation, but the timing is always spot on. So when he writes a message, you know the price of VeChain will either pump or take a nosedive and thus this is a brilliant source of information. Who would have figured.. 4chan..
Palm trees in the snow
We tend to think that it is just the market that moves a price up or down. Again, there is more than meets the eye. Sometimes a chain gets an unexpected bump and the reason behind it might surprise you. Let’s take a look at the Cindicator (CND) case. Again, this is one of those oddball source of information cases. On the 18th of January I got a message regarding a pump on Neblio (NEBL). This was an interesting one as this was not the average ‘Pump and Dump’.
What was going on? The source had the inside loop on a report called ‘Palm Beach Confidential’ by ‘Palm Beach Research Group’. Yes, it is one of those ‘make me rich quick’ reports. But the thing is, there is a lot of money behind this one. And when I say a lot, I mean a LOT. And yes, there is front-running involved as it is confirmed that the guys behind this report buy-in before the report comes out. The ‘Palm Beach Confidential’ report was scheduled for release at 21:30 (depending on your time zone) and it was still unclear which chain would be involved. Just before the release, the source found out that it would not be Neblio but Cindicator. And look what happened after 21:30. “Boom Baby!”.
If you look at the CND charts you will also see that there has not yet been a real dump. Probably because of the fact that the people using this report are not selling to quickly. But if a pump is caused by a scenario like this, you should be careful. Things are not always what they seem and can go sour very quickly. The reports usually float around on 4chan. For your convenience, I also provided a copy of the most recent one which you can find here: ‘Palm Beach Confidential’
Buy the rumour sell the news
Now this is a big one and it is as old as time. ‘Buy the rumour sell the news’ happens a lot in crypto and it happens time and again.
Think of investors like piraña’s that seek out undervalued chains. When rumours start to surface that a chain might have something big to announce, these investors will start to buy in. So the rumour will be priced in before anything has been announced. And because of the rumours, the value of a chain can get really inflated. If the rumour is false or below expectations, the market is overbought and this will cause an immediate selloff. As you can see, this is dangerous territory. Especially in crypto where rumours go as far as ‘Bitcoin will reach 1000000’ and ‘The position of the sun will be changed by this blockchain’.
Let’s give some clear examples so you will be able to tell when this might happen. Maybe you remember the Lisk (LSK) price plunge. At the end of November last year, the price of Lisk took a nosedive of 20% in just a few hours. The reason behind this dive was that the market, driven by rumours, was over-expecting. During a Meetup in Berlin, the real date of the rebrand was announced whereas the market was expecting a rebrand. The market interpreted the announcement as if the rebrand was postponed. This was all due to the rumours driven by the ‘moon boys’. The price took a dive and took some time to recover. But eventually it did and then some.
Before the Berlin Meetup the Reddits and Telegrams where full with “This is going to be huge” and “This is the best thing since sliced bread”. Although Lisk is great and I believe the value will increase quite a bit more, the market was overreacting. And when you get in during a moment like this, you will get burned for a while.
Let’s fast forward to the day before yesterday. The same thing happened with VeChain. One of the VeChain partners announced that there would be a live stream and the CEO(Sunny) of VeChain would be speaking and that something big was going to be announced. Keep in mind that this partner is a real Corporate so even doing something with blockchain is huge to them.
The market started to act. The price got pumped because the rumour mill was put in high gear. You could read stuff like: “They will announce a partnership with the Peoples Bank of China” and “China go full crypto with the Yuan and VeChain is the one who is going to do this”. Whenever somebody tried to temper the rumours a bit messages like: “Why are you so negative, this thing will moon, stop fudding!” would appear (a nice tell).
This continued until the livestream finally was up. Just a moment before they went live, volume skyrocketed (again a nice tell) and the price started to react erratically (again a nice tell). Although what was presented was quite special, it was nothing new. No surprises and definitely not the stuff that was expected by the ‘moon boys’. This, off course, caused a massive selloff. “And then Kapow! ”
Another classic example of ‘Buy the rumour sell the news’. And it this one you could smell from a mile away. When warnings get ridiculed without any clear arguments, you know enough. Really funny, I got banned from from some telegrams for issuing warnings. So admin, if you read this (and you probably will), I hope you die of crotch rot. Next time I hope you will act responsibly and protect those new investors who are putting their last dollars into something that looks and smells like a ‘Buy the rumour sell the news’ event.
VeChain will recover, don’t worry just hodl. But please remember what happened because the upcoming rebrand event on the 26th of February is just an event. The rebrand itself will probably not be completed until June this year and I already see that the rumours are starting to is pump this event.
A last general word of advise to all blockchain CEO and Marketeers: whenever you have an event, do not hype it. It will backfire, especially when you have nothing to tell what your investors don’t already know. This will make investors lose confidence in what you are doing. It is better to give news directly without any pre announcement. And when markets start to pump and start to overflow with rumours, just kill the rumour. A simple tweet is enough. Look at what some chains do. They just deliver and let the world know by a simple tweet. Marketing is very important, especially in software, but you always need to have something to show for.
The market is irrational but always right
Markets sometimes act irrational, but if you dig a bit deeper, you will find out why it acts irrational. Take for example the BTC futures which expire today. As you can see, there is a BTC dump going on right now. This is because the profit on the BTC futures outweigh the cost of lowering the price of BTC. It is a gamble but it seems that some whales are willing to take the risk.
So as you can see, it is very important to take the time to get yourself informed. Information is the key to success, although sometimes it requires a big pair of hairy balls to actually act on it.
The market is quite bear now, and refreshing your Delta or Blockfolio every 5 minutes will not make you a happier person. Continuously looking at a bear market will suck the life out of you. It is the time of year to get informed and to sit back and enjoy the ride.
Take a holiday, have fun, read, clear your mind and inform yourself. The bulls will eventually return, but January and February are usually not the months where they have a winter sleep. Do keep an eye out because in crypto you never know when they will wake up again. And remember, when stuff happens in this highly volatile crypto market it always is ‘More than meets the eye’. Especially when the bots and whales are involved.. Stay tuned.
I hope you liked this article. I am thinking of writing an article every week. If you like this idea, than please share, tweet and clap this article in every channel have at your disposal. If you have any suggestions, remarks, inside info or stuff you want me to write about, you can contact me via the ancient way of email on olivier@airwave.io.