THE WINNER'S CURSE

[Sticky Bomb]

This is very common in the market in general, not only in the financial market. We saw it in practice during the pandemic with hand sanitizer, masks, and even toilet paper. It is a FUD phenomenon, or what is also known as herd behavior. It is human irrationality acting in its purest form.

I believe this scenario tends to play out very well when there is an unhealthy hype around a product due to some temporary situational development. I could remember during COVID period, my friends and I wanted to use the rising demand for face masks to cash out, producing reusable face masks and trying to sell them, but when we were done, the hype around it had already died down and people could do without it in my country and starting to move freely. We ended up slashing prices and struggling to even recover our capital.

Secondly, these works perfectly in altcoins and shitcoins since influencers and project owners would hype the products and create artificial pumping of these projects to create FOMO, attracting investors to jump in, only for them to recognize they have been robbed after a while when the project is rugged. Such a thing is not to be found in bitcoin, buying the top is not a challenge since the prices have always recovered and broken new highs, making those previous tops the new dips which investors pray the price crashes to so the make purchases.

[goro_chief]

This is a very rare theory almost no one talks about. It explains how people can win something and still be worse off than before. When a person overpays for an asset, opportunity, or deal just cause they were the most aggressive bidder, the market punishes them later.

We can almost see this happening all the time in the crypto world. A coin starts pumping & people rush in. The price keep rising because everyone is afraid of missing out, then someone buys at the very top just because emotions are now driving decisions. Theoretically speaking, that person win's the trade execution but he also loses financially because he overestimated the value of the coin.

The things is, most times, the victim don't realize this until months or years later. This theory explains how hype is often not real victory or profits.

I agree with the idea, but it’s not always that simple. Some assets keep running longer than people expect. The problem isn’t buying strength, it’s buying without understanding value or timeframe. Blind chasing is the real enemy

[Wiwo]

Some comments are viewing it in the perspective of crypto space, I could derive the post towards another perspective in the reality of life.

In my country, everyone chases the trending jobs that circulate round the corners, those that actually put their commitment into it is crying to leave because the hype is coming to an end, it's becoming harder to get a job now, why those that stayed away from it is pretty doing fine in their endeavors.

The point is this, boring activities and jobs eventually ends in joy while following hype just seems like chasing wind and catches crumbs over time. It's the hard truth that hurts.

Very well said mate, hype and trends most times doesn't end well and for that reason is quite unreasonable to follow trend as way of seeking jobs, individuals that have that understanding are currently building a path for themselves either through following they career path or venturing in businesses that they found motivations.

Long term results is better than quick profits seeking,  let take example from those thay rushed into content creating because of the hypes and huge amount those established creators are getting,  this made alot of them to follow thay hype to start creating content.

At the moment alot of them are complaining of low engagement and payments,  this shows that money was the motivation and not the real activities itself,  in no time when they dont get that money,  they will lose their motivation.

[Hatchy]

I don't consider this to be curse related, do you even know the meaning of curse?

I have taken pictures of my portfolio at a very high price and few months later it turn to dust, this is not a curse by my own mistake based on my target, I expected more, would be better off calling it greed rather than curse.

Something that usually happens to me while trading, is the excitement to see your trades in good amounts of profits, only for you to return few hours later to see that you have been stoped out and your trade invalidated. This isn't a curse, but sometimes you begin to wonder if the market was built to make you lose. I've seen some people I sent trading signals out to make profits from the same trades, but I end up losing. Reasons might be because I was over confident and risked too much. Or I held the trade past the very point I was meant to exit the market.  Many time we find our selfs in this kind of situations, where our emotions takes the better parts of us.. we just try to remain in control..

[Mate2237]

True this theory has a great applications in crypto.most altcoins are always over hyped due to false narratives that is been passed by the creators which tends to make money from their coin.so they create a wrong narrative that will make people to increase their believe and trust for the particular coin only for them to realize that it's was all a joke or mirage which was created by the developers of such project.


When it comes to crypto currency you should not just rush into investing in a project because people are going to it, but you should do your personal research before going into it knowing that emotions doesn't matter when it comes to crypto if you rush into investing in a project based on rush or emotions you will definitely regret at the end of the day.

[Gozie51]

This theory explains how hype is often not real victory or profits.

If only you can know a coin under hype, that will be fine. A large majority of people get trapped because of FOMO, they jump in and get hooked then eventually losing out. Some people invest because of the team involved while living out what is important which is the utility of the coin. If a coin has utility, it will be very easy to sail even under difficult development and marketing process. And Personally, there is an exchange that a coin will be listed on that I will appreciate to invest because if an exchange has high trading volume, it is possible to grow faster because people will see it and push some quota of their investment.