Crypto - place where promise is worth more than product

[Tytanowy Janusz]

Last days I was thinking about how market is evaluating projects. How people makes their financial decision (especially in crypto market).

I found out that the more real value project has (real value like $$ from selling electricity to every citizen in a country) the lesser its price is compared to value and the less volatile and exiting the chart is. Just simple scenario. If you see that company with 1 mln $ annual profit, 5% divident, with little perspectives to increase profit in next years (f.e company sells electricity to every citizen in a country, it will not sell more) and its price pumps 10x you know what to do ... short/sell definitely not buy because you see that it is overvalued. You use fundamential analysis indicators. P/E or P/BV. You see that percentage of divident is going down. You know what to do.

But what if project that has 0 $ annual profit and 0 finished product pumps 100x? You rush in because you believe that market knows more, that its product that will be delivered one day will beat everything that is already available and will rule the word. Perfect example is ADA that has 0 user base, 0 finished products. 5 years of making promises is enough to be evaluated at $50T. And here i dare to say that ADA will never deliver its product. Mainly because its financial shot in the knee. ADA is currently evaluated based on promises. Promises to deliver the best chain. With finished product will be evaluated based on its product. Will have to compete with ETH, TRON, BSC. People will compare user base, speed of chain, daily TX, dynamic of grow, use cases that ADA has compared to ETH and others. And than will try to evaluate it based on data that market finally has. And the best part is ... I dare to say that its not all about tech. Even if ADA will deliver better chain than ETH or TRON, BSC ... it has 0 infrastructure. It will take months for people to learn new wallets. Months for deves to buld something that works on ADA. What will happened faster? CZ will copy ADA solution (its open source product so it will be copy-paste) and launch BSC v2. What advantages ADA will have that day with 0 user base while BSC is now the biggest chain (5 times more TX than ETH) is promoted by binance that own CMC (the biggest user base and the best financial situation - binance annual profit is bigger than $2T) and huge infrastructure that was being build by ETH for years?

Why people rush to buy such assets. Promises of product evaluated higher than products that already are here and works. From my experience such products pumps to the moon and crash weeks before releasing product. Leaving investors with crashing price and product that no one is using.

[Heisenberg_Hunter]

This is indeed a good topic to discuss during this bull market. The majority of the crypto market in general is driven by fake hypes and promises and this was accelerated to further extent in the bull market of 2017 and 2021. ICO and Defi were the two major differences between these two period where ICO projects received the funding from the investors and ran away with the money while Defi projects received the funding, provided the yield and then failed all of a sudden. But in the case of ICO, few projects never materialized and ran away as soon as the scammers received the money from investors but in the case of Defi they slowly gained the investors confidence by providing the yield and later when the investors deposited higher into the platform, they scammed all of a sudden and ran away. 2021 is even worse where many scammers openly admitted that they will fail and steal the money and instructed the investors to invest in the platform at their own risk, one such example was YAM coin.

From a personal experience, I invested a few $$ (cumulatively accounted to ~$1k) back in 2018 and almost every coin I have invested was a scam and I stood with a meagre $250 after the losses. Many had the potential and almost every coin I invested were audited properly and had the required licenses but failed miserably during the prolonged bear market. While on the other hand, coins which didn't have the potential nor had the licenses and which were a smaller competitor to the invested coins pumped in 2021 bull run. Should I call this my bad luck or was a bad investment?

IMO TRX is a shitcoin marketed by the clown Justin 'Baby' and I have firm thoughts it might go back to zero anytime in the near future. BTT, the coin which was marketed really good by Justin is a shitcoin and you can find the reason for the same in my topic which I created a few months back. There is zero use case and is a scam, but it is among the Top 50 coins in terms of market cap whereas Monero which is indeed an actively developed coin stands at #26. Should we call this as a fake hype or should we call this a bad luck to XMR investors?

Why people rush to buy such assets. Promises of product evaluated higher than products that already are here and works. From my experience such products pumps to the moon and crash weeks before releasing product. Leaving investors with crashing price and product that no one is using.

The market is dominated by newbie and greedy investors who are actively looking out for opportunities to make quick bucks rather than supporting real projects which can scale up and bring more good to the community. We can quote various examples similar to these and the famous one being DOGE (the under-developed and abandoned fun project) has higher market cap than Monero! I was a newbie in 2017 bull run and so was everyone else during their respective times when they entered the market. I invested in potential projects which could have earned me some cool fiat but almost every coin failed and I was left with losses alone. High potential projects are always risky and we tend to lose more but nowadays the whole crypto market is filled with highly potential projects which delivers fake promises and nothing more than a failed product.

[tbct_mt2]

Crypto projects only show their real values when the market is bearish. In such bearish market, you will discover about 10  or 20% of projects are really live with developments, community expansion, partnerships, etc. You can not conclude they are good projects but from that list of 10 or 20%, you can do more researches and find a few good projects to invest.

Those projects might likely be the ones will keep up their promises with real developments, real products and keep moving forwards with Bitcoin and the market. They can not release good products as they promised because nothing perfect can be done all times. At least you can say they might hardly die.

[Tytanowy Janusz]

IMO TRX is a shitcoin marketed by the clown Justin 'Baby' and I have firm thoughts it might go back to zero anytime in the near future.

I agree with most of you post despite this point. i'm not sure if you know but tron, thanks to its speed, adoption and low costs is the biggest platworm for tether:

ETH - 30,912,401,959 USDT
https://etherscan.io/token/0xdac17f958d2ee523a2206206994597c13d831ec7

BSC- 3,179,997,922 BSC-USD
https://bscscan.com/token/0x55d398326f99059ff775485246999027b3197955

Omni - 1,335,000,000
https://www.omniexplorer.info/asset/31

Tron - 31,993,553,636 USDT
https://tronscan.org/#/token20/TR7NHqjeKQxGTCi8q8ZY4pL8otSzgjLj6t

Biggest platworm for biggest stable coin. Thanks to that TRX has 4x the ETH traffic.
https://tronscan.org/#/data/stats/txOverviewStatsType - 4 M TX per day
https://ycharts.com/indicators/ethereum_transactions_per_day - 1M TX per day

I'm not saying that TRX is a good investment product, but for sure it deserve top 25CMC especially that we have
ETC - useless dead fork - top 23 CMC
XLM - dead project that was sleeping all defi bubble, nft bubble. Does not even have its dex, bridge - top 19 CMC
DOT- promise without product, infrastructure and userbase- top 9 CMC
ADA- promise without product, infrastructure and userbase- top 5 CMC
BCH - useless fork - top 12 CMC

And many more (like ICP - wtf is this shit?).

The fact that ICOs collect money and run away leaving people with promises only is one thing. Projects like ADA is second thing. 4,5 years of existance. 500x from ICO price. $41 billion marketcap. And still no userbase nor even working product. TRX dont fit here because they delivered product quite fast.

[DrBeer]

It has now become a trend to think and evaluate crypto products. In the days of insane HYIPs in 2017, it was possible without much hesitation to invest in a bunch of projects, and be almost 100% sure that half of them would shoot so that even a complete non-return of the second half of the investment would not be a noticeable loss. The main thing was to withdraw and fix profits on time. Now it has become more difficult - a lot of control, thinking investors, a decrease in wild risk lovers, a scientific approach ...

[ahoenk]

Its all because everytime crypto market on bullish people are over liquidation. Then suddenly so many project comes up. I wont trust product which is new comer as developer, usualy they only make the project look fancy but the target is not in the product. Its only grabing people money as fast as they can.

The worst thing is people who invest then they asked about exchange and marketing next day.

Thanks god i was supported the project which gives crypto world real " thing " like AAVE, swissborg and Dent.

The promised for product development is something good if its real ( remember,... Ethereum was only a promises when vitalik doing fund rising ). So as an investor and supporter we can give them fund to make something usefull to this crypto world.

We as a community need to warn people around us if we have info about fake project which only ptomised any impossible thing.

[fullhdpixel]

Why people rush to buy such assets. Promises of product evaluated higher than products that already are here and works. From my experience such products pumps to the moon and crash weeks before releasing product. Leaving investors with crashing price and product that no one is using.

That is true, people promise crazy stuff and others totally buy it. I have seen people invest into things that have maybe 5% of what they promised and they get the money like they completed the project. I do not want to name any names but there are like some idiotic projects that do not even promise something but just gets hype because they spent like a million dollars on marketing and that's it, they are suddenly the thing people talk about.

Give me a million dollars and I can make a project that will be in the top 500 of CMC for sure without a doubt, all I have to do is pay all the crypto related "news" places to write an article about me that I will confirm, then pay all the twitter influencers I can find to do a giveaway, then pay all the telegram channels I can find to share me on their channels, and pay all the youtubers I can find to make a video. All of this in return makes a project HUGE without actually doing anything technical in the blockchain part, just be copy of some other project.

[Nalbo]

Regarding Tron, already over 70% of it's total supply is in circulation. It has a total supply of 100B which is large enough to be readily available but small enough to be in demand. The transaction fees are almost free. Though they are not as popular for high yielding (and probably unstable) DEFI farms, they still have a good volume of DEFI, Dapps and games. I utilized this dip to buy some of it.

[Heisenberg_Hunter]

I agree with most of you post despite this point. i'm not sure if you know but tron, thanks to its speed, adoption and low costs is the biggest platform for tether

TRX has been heavily marketed and manipulated by Justin and he (the founder) himself has agreed that's indeed a shitcoin  I'm not completely against TRX but the way they are paying celebrities and trying to pump their coin is unacceptable on any grounds. Moreover with the shady practices which Tether is following since the beginning be it the way they hide the pegged USDs or the way they are moving their company, many of the traders are moving over to trusted stable coins like USDC and BUSD which are properly being audited and they indeed show the proof of funds as well.

I'm not saying that TRX is a good investment product, but for sure it deserve top 25CMC especially that we have

I agree with this point particularly. The top 25 is being occupied by tons of fake promise coins and useless forks particularly the BCH and ETC. ETC is suffering 51% attack now and then but newbies has pumped it to new highs in 2021. This is more than enough to prove how immature the current market is and why supports are lacking strongly for bitcoin. DOT had a powerful marketing strategy backed by ETH cofounder and the same was ADA. DOGE on the other hand, the mother of all shitcoins is enjoying a strong support from newbie community altogether. We need a huge clearance in the market which can dump the shitcoins like doge going back to $0.002-$0.005 range.

ICP launched at $700 per coin (if I am not wrong) and tanked to an all time low of $35 yesterday. Same goes with Filecoin which was once considered to be worse reached new highs this year. XMR with a strong developer base deserves to be in Top 10 but the shitcoin mania is taking crypto market by storm where fake promises are enough for 500X returns.

[Jackl87]

Last days I was thinking about how market is evaluating projects. How people makes their financial decision (especially in crypto market).

But what if project that has 0 $ annual profit and 0 finished product pumps 100x? You rush in because you believe that market knows more, that its product that will be delivered one day will beat everything that is already available and will rule the word.

Why people rush to buy such assets. Promises of product evaluated higher than products that already are here and works. From my experience such products pumps to the moon and crash weeks before releasing product. Leaving investors with crashing price and product that no one is using.

The crypto space is really weird in that regard. During the last bull run that lasted until the beginning of may there were so many new projects coming up that did a 10x or even more right after the listing on a DEX which meant they had a market cap of 50M or even more in many cases. The thing is most of them only had a whitepaper, a website and a roadmap but no working product at all. So those new projects that only had a idea or plans where already evaluated higher than many medium-sized companies which is crazy. I guess what drives us crypto investors is the dream of investing early in a project that does really deliver and therefore brings us a 100x or more of our investment...but of course that is very risky.

[amishmanish]

Last days I was thinking about how market is evaluating projects. How people makes their financial decision (especially in crypto market).

I found out that the more real value project has (real value like $$ from selling electricity to every citizen in a country) the lesser its price is compared to value and the less volatile and exiting the chart is. Just simple scenario. If you see that company with 1 mln $ annual profit, 5% divident, with little perspectives to increase profit in next years (f.e company sells electricity to every citizen in a country, it will not sell more) and its price pumps 10x you know what to do ... short/sell definitely not buy because you see that it is overvalued. You use fundamential analysis indicators. P/E or P/BV. You see that percentage of divident is going down. You know what to do.

Fundamental analysis of trying to put a value to a stock on the basis of potential earning is a method used by mature investors. Yet, even in the stock market, you can find stocks which are way overpiced in terms of their P/E due to the hype around them or the personality cult of their founders. TSLA is probably the best example of this.
Crypto amplifies these phenomena ridiculously. There is soooo much vaporware that if a project shows even a little bit of progress in terms of launching a website, managing a community and having an active TG/ Discord, that is generally enough to increase the price in the bull-market. If the project has a celebrity founder who seems sincere in his delusions about making the best blockchain (Charles Hoskinson), then you have projects like ADA pumping without any product and usage.

Why people rush to buy such assets. Promises of product evaluated higher than products that already are here and works. From my experience such products pumps to the moon and crash weeks before releasing product. Leaving investors with crashing price and product that no one is using.

You are right about the constant copy pasting of open source projects. This is why, in time we'll have essentially no truly open-source, decentralized projects except Bitcoin. All of these others are vulnerable to take-overs and FUD attacks. There only salvation is actually having a unique product. For example what the first AMMs did. If its not unique, its not going to survive.

This brings us to the old question. How to ensure returns in the long term? I think the first thing needed is focus as an investor. You'll hear so many stories of easy money being made by insincere shills and influencers, that you'll find it hard to focus in this market. This makes you further miss the opportunities. I have experienced this personally. IMO, the best way is to find some niche that actually interests you. Then start following a few projects that are sincere about the "financial innovation" aspect. Being part of the community in actual projects gradually opens up other opportunities. I personally find it impossible to follow pumps and dumps and just gamble with a shit-ton hoping to strike gold. I know people for whom this has worked. But my luck has never been that good. That is why, the best method still is to stick with the fundamentals like OP lamented in the beginning of this post. Sooner or later, this works.

[btcltcdigger]

Imo, most of these people just want to ride the hype train.
Meaning they buy with idea that they'll sell very soon, once the hype kicks in.

And as history has shown us, this can be profitable for some, and cause loses for others

[Tytanowy Janusz]

@amishmanishi I pretty much agree with you post except this:

There is soooo much vaporware that if a project shows even a little bit of progress in terms of launching a website, managing a community and having an active TG/ Discord, that is generally enough to increase the price in the bull-market.

Here you state that even a shitcoin can pump if it take care about community and pretends to be doing something, while here:

Then start following a few projects that are sincere about the "financial innovation" aspect. Being part of the community in actual projects gradually opens up other opportunities.

You suggest to fallow few project that pretends to be doing something and become part of community Even shitcoins can do it right?

I don't fallow pump and dumps, i don't follow shillers "AKA crypto youtubers", I don't try to find "new ETH, new BTC", I call all altcoins "shitcoins" except maybe 5 coins that were good investment before this massive alt season. Now everything is way overpriced.

[wheelz1200]

Crypto is definately a "get ahead of it" game.  Buying alts before anything is ever shown from it is a keen to gambling, some win most lose.  The only winners are always the "developers".  The alt game is fixed, everyone loses as soon as the market turns for the worse.  This next bear will be no different, bankrupting paper richess from people who blindly thought it was their right to just...get rich.