The Game of Crypto
"Crypto is not a team sport. It's more like the Hunger Games. You use people until they no longer serve a purpose, then you eliminate them." -- Kara 2021 AD
If you want to be an expert in a particular domain, you must put in the work as well as invest the time. Professional athletes are not born with amazing talent, but rather spend countless hours mastering their craft. Crypto is not an exception. The most successful traders are the ones that have put in the time and mastered the game. Technical Analysis (TA) and Fundamental Analysis (FA) are often mentioned as the core building blocks in becoming a successful crypto trader. However, even with expert knowledge of these areas, many traders unfortunately still lose money.
Crypto is not an investment, at least not one without significant risk. Crypto is in fact a zero-sum game. A zero-sum game is a concept which evolved from the mathematical field of game theory, where the total gains and total losses of all the participants sum to zero. This is imperative to acknowledge and comprehend as there is a common misconception that "everyone is making money" in crypto. In reality, there exists an asymmetrical distribution of “winners”, where a small amount of traders profit at the expense of the majority of the participants or “losers”. Zero-sum games can produce temporary alliances, where multiple individuals pool their resources to maximize profits. However, these alliances are often short-lived, as there is a financial incentive to eventually turn against your allies. Why then is everyone saying We All Gonna Make It (WAGMI)? They are either lying to you, or they are brainwashed. The sad fact is that in the crypto game, We All Not Gonna Make it (WANGMI).
The objective of the Crypto Game is simple: For any coin x, over period of time t, you win by having a positive sum after adding up all of your buy and sell transactions of x during t. The reasons why most who play the game fail to win are numerous, including: scams, being misled by influencers, cognitive biases, buying into the hold/hodl retirement hype, etc.
Yes, All Crypto is a Ponzi
Every single cryptocurrency meets the technical definition of a ponzi scheme. The early investors generate returns from the later investors, and when the cryptocurrency bottoms out, those left holding are the losers. A future blog post will detail why those who understand and embrace the fact that every cryptocurrency is a ponzi, are the ones that profit the most.
It is vital to understand the different types of players in the crypto game. Venture Capitalists (VCs), investors, developers (devs), promoters, scammers, traders (both expert and novice), influencers, maxis, simps, are some of the major players of the game. The categories are not mutually exclusive. A scammer can be a VC, a dev a promoter, and so on. A plethora of ordinary traders are buying into the hype that everyone makes money in crypto, and as they aim to get rich quick, they inevitably transfer their money into the hands of others. Superior players constantly devise new methods of parting these traders from their money.
Hold Your Money, Not Your Crypto
The first step in making money in Crypto is to not give your money away. Some players spend their time convincing others to give their money to them. They are not expert traders, because if they were, it would be unnecessary for them to look for other sources of income. Examples of where not to give your money:
Paid groups, newsletters, Patreons, etc.
GoFundMe’s or "charities" of any kind
Investing into coins at poor entry points
If someone is asking you for money, for any reason, it should be an immediate red flag. Sometimes it may seem innocuous. An influencer will introduce a coin, and because you believe they are an expert trader, you enter. Entries are difficult, and most influencers call entries at or near the top, and some dump on you as they bring you in to be their exit liquidity. Paying money for their advice is actually losing twice, as you hand your money over for their advice, and you give up your money again on the bad entries. There is a vast amount of examples of influencers with huge followings, who appear to be honest and trustworthy, tweeting about an altcoin, and as you are buying, they are selling (dumping). A recent example is where an influencer claimed they could not afford to help their Grandmother pay for her medical bills as she was suffering from congestive heart failure. It was later proven that this same influencer was buying NFTs, one as much as $24k, the same time she was operating her GoFundMe for her Grandmother.
In summary, we have learned that it's not easy to make money in crypto. The weak-minded are manipulated, as they are the ones that have not put in the work to be successful. They are desperately searching for the next "get rich quick" moves. If you want to make money in crypto, without scamming others, you need to learn how to counter-trade these weak players. So how does one counter-trade these players? How does one master the game? Upcoming blog posts will lay out strategies that I have used successfully in the past.