The crypto flywheel effect.

in LeoFinance3 months ago

The more that the token goes up, the more that people want to buy your token.


Ref: Reddit

The more that your token pumps. The more people that are willing to buy it.

Even long term crypto users panic sell when prices are dropping. Sell at a loss when the markets are down. Panic when we are in a bear market and leave it all behind them.

I've heard that crypto is dead a lot of times over the past six years since i've been part of this space.

I could have sold my bags at any stage over the past two year and given up like so many others. But why would you sell low if you know anything about this space or the tokens that you hold.

Is it lack of understanding?
Lack of interest?
Lack of belief?
Or just a lack of balls....

It's easy to give up when everybody is against you. Easy to stay out when the narrative is negative. People are easily swayed by the news and when the markets are down it's nothing but negative news.

Bitcoin is crashing.
The government is going to ban crypto.
Crypto is a scam.
This person lost money in crypto.
Nft's are just pictures....

The negative news cycle.

Or in reverse.

The bull market.

When bitcoin recovers it's previous prices fast and looks like it's going to blow them out of the water. People start hearing all of the success stories where John bought a token for 1c and it's $20 now. He made a fortune.

Bitcoin is in the news as it grows 20% per day and it feels like you can't lose. Suddenly it seems like a good buy at $40K when you spent two years avoiding it at $20K.

Your brainwashed.

tokens that you wouldn't touch last year suddenly go 200% and you jump in to make some gains.

No knowledge.
No research.
No problem.

If the candle is green, everyone is keen.

The token gets some mainstream attention and suddenly it's on everyones radar. The early adopters have made their money. The early adopters are shilling it like crazy and the bag holders are arriving with their money held out.

That's how the flywheel works. All you have to do is get a bit of momentum at the right time and the people will do the rest.

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I was talking to a friend today who does wealth management at JP Morgan for very high net worth people. A month ago he was telling me he's never seen so much money sitting on the sidelines waiting to find a home. Today I asked him if any of his clients have asked him about investing in bitcoin and he said no one has mentioned it to him in years. He then told me about the amazing gains in the NASDAQ this year and was surprised when I told him that btc has crushed those returns this year.

I don't think he's going to run out there and start recommending it, but its telling that none of these people he works with who have tens of millions of dollars have paid any attention to bitcoin or crypto in years, and they are sitting on more money than ever. The fireworks could be insane.

We've never had institutional investment in crypto at scale so far.
The last bull run was crazy and that was just joe off the street. If we do see some of this money move into crypto then all ell could break loose.

The higher that the price goes the less liquidity there is for bitcoin and it wouldn't take much to see 100k as people get greedy.

Brilliant for us as it will drive all of the alt markets right behind it.

exactly. We're already seeing how the price is getting pushed around without a lot of money coming in relative to other markets.

On another note, I had a loan against my BTC from coinbase that was supposed to be paid off late 2024 but they ended the program yesterday. So everyone with an active loan either had to pay the balance or sell some of their btc collateral yesterday. I fully expected there to be a pretty big dip in price the day they likely liquidated thousands of people but price shot up yesterday instead. It's a testament to the strength and fundamentals of this rally. It's not just short squeezes and whale games.

I can't wait for it to filter into the alts

The market is really flunctuating right now but one thing I am certainly sure of is the Crypto is here to stay among the midst of the uncertainty. It is the future

Crypto with real use case will thrive in the long run while all of the scams slowely die off as people get wiser.

There is a reason that the big companies are looking our way now. They know it's inevitable.

Funny how the cycle more or less keeps repeating itself and people always getting caught up with it. Many desire what's popular or hot and stay away from what's unpopular even though it may be the same thing on the different time horizons.

Same thing, over and over again.

So then it's up to us to use that knowledge and break the cycle.

Yes, indeed. They say knowledge is power when used correctly. Not being overly affected by the cycles is a work in progress.

It's easy to give up when everybody is against you. Easy to stay out when the narrative is negative. People are easily swayed by the news and when the markets are down it's nothing but negative news.

Definitely, I'm on the opposite end of the Spectrum and never sell anything. I think I'll sell tokens in this bull market. For example if Chainlink hits €25 I think I'll sell half, if not all.

We've got to remember the cyclical nature of Crypto and not be blinded by greed and take some profits.