What we can learn from the Titan crash and Mark Cuban. Authored by Ehvrin.

By Ehvrin | Ehvrin | 21 Jun 2021


 

As you all already know by now Titan crypto has fallen to the bottom of the precipice leaving many enthusiasts distraught. Even billionaire businessman and shark tank member Mark Cuban got caught in the pitfall. Today in this ever so relevant case study we'll unravel what went down with the crypto that had such high expectations.

Through underlying tokenomic derived fluctuations, Titan’s price went to $65 and then pulled back to $60. Subsequently, whale investors which are investors that own majority equity suddenly started selling off their assets. As the value of Titan started free falling small retail investors started to panic sell worried about the crypto's bank run. A bank run occurs when a large number of customers of a bank or other financial institution withdraw their deposits simultaneously over concerns of the bank's solvency. As the supply drastically increased and demand decreased it drove the price and value of the coin close to zero. Mark Cuban is now calling for cryptocurrency regulation in response to the incident.  

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Here are the key takeaways.  

1. If you want to invest in something great go for it, but do your own research don't bandwagon into something you don't fully understand.  

2. Novel investments invites precarious, cautiousness, and doubt. This means that without consolidation of certainty in value and viability in the asset investors are prone to withdraw prematurely.  

3. Don't confuse investing with gambling. Investing is research and data driven. Gambling is hunch, wishful thinking, and adrenaline driven.  

4. In the absence of long-term investors you regret not investing alongside them. They are the strong lines of resistance when speculators, day traders, and gamblers withdraw from their positions.

5. Always have a plan B. Whether it's diversification, portfolio allocation and ratio, or setting a pre-sell GTC. Risk management is always a good insurance against uncertainty.  

In essence, what we can learn from this incident is to not to forget the fundamentals of investing. Without the fundamentals and critical thinking we no longer act as humans, instead we return to our primitive state being solely driven by emotion. 

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Ehvrin
Ehvrin

Investor and philosopher. Want me to write and make a video about a certain topic, drop a comment on my new Youtube channel: https://tinyurl.com/youtube-ehvrin


Ehvrin
Ehvrin

A blog that focuses on investments, sociology, and macroeconomics. Want to read more? Follow my updates on Twitter. https://twitter.com/ehvrinupdates

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