I have beeCrypto Manian pondering writing this post for some time and after another night of little sleep thinking of the Crypto Mania that is occurring, I felt that I had to get it off my chest As the title explains, I would like to discuss both the Manic trend in Cryptocurrencies and Initial Coin Offerings.
As a disclaimer, I do not pretend to be an expert in either area, but when I write I attempt to give you the details as set forth with an objective outlook. At no time do I endorse or suggest buying or selling any Cryptocurrency or Token
That being said, here I go.
Crypto Mania
We all know that there has been a large number of cryptocurrencies that have been launched since the advent of Bitcoin. Some were built to mimic Bitcoin and other to improve on it. To this point, bitcoin has no rivals, but there are contenders that may give it a ride for its money in the future. That being said, I am not speaking to the merits of Dash coin itself when I tell you this story, but just the attitude of some investors.
On my recent trip to the United States, I went to visit an old roommate of mine who lives in Los Angeles. He is currently a CPA but mostly works on investments in real estate and other markets. We were sitting around a fire pit smoking Cuban cigars when he asked me what I did. Normally when people ask me this question, I respond with the basic question,”Do you know what Bitcoin is?” I start with this question because if I open with ana answer like, “I write about ICOs”, he probably would have no idea what I was talking about.
The conversation continued and this is when it became interesting. I explained basically how Bitcoin was built on Blockchain Technology and that the technology was the interesting part, aside from all the merits of Bitcoin of course. I gave him a basic explanation of Initial Coin Offerings. He then asked me an interesting question. “Have you heard of Dash Coin?”. I answered that I had, but that I was in no way very knowledgeable about its working and couldn’t add much. He mentioned to me that his partner’s wife was interested in becoming a master node for Dash to earn some money.
I asked him what he knew about Dash and Cryptocurrencies in general. The answer was what I expected, “not much”. So, I asked why he would invest in something that he didn’t know about or understand. His reply is mainly what prompted this post. He explained to me that when there is a wave on the way up, you join in and ride it. That was it, no basic understanding, no fundamentals, just a wave. Sounds like Mania to me. I was stunned. Here was an astute investor that wanted to invest in 1,000 Dash Coins (not knocking Dash, it could have been any cryptocurrency) because everyone else was doing it and making money.
He went so far as to put his “Crypto-Advisor” on the phone. I had a similar conversation with him and was stunned. His explanation basically was that he knew my friend had some discretionary income and this was a way to capitalize in the rise of cryptocurrencies. I asked him why he would invest in something he didn’t know much about and he answered similarly to my friend.
It seemed to me that this “Advisor” wanted to make a play at the cryptocurrency market on my friend’s dime, lock up his money for the 1,000 Dash coins, hardware, and all other expenses because he had “discretionary funds”. I told them that they were crazy, they were gambling and not investing. My friend explained to me that they were guaranteed an 11% return in the first year…. But what about the consideration that the price of Dash could crash? What is 11% of nothing? I am not sure but I think my input fell on deaf ears.
Crypto Mania Summary
Again, I want to emphasize that I am not knocking Dash at all, and it may be a wise decision for him to invest in becoming a master node but one thing was obvious to me, he had no idea what he was getting into. It occurred to me that this must be the mentality of many of the new investors in cryptocurrencies, the ride the wave mentality. It scares me a bit, because who will be left holding the bag if we are in for a Crypto Bubble.
You can see my post regarding the Crypto Bubble reminding me of the Tech Bubble here:
https://urbancrypto.com/blockchain-bubble-in-the-making/
