Chasing ‘hot shots’ is less likely to make you rich!

Chasing ‘hot shots’ is less likely to make you rich!

By Dzoelx | Scripts | 13 Oct 2021


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Off to the market! And what are we buying today? The most popular cryptocurrencies? Yahoo finance recently featured Floki Inu; the meme coin based on Elon Musk’s dog, lol. Funny how that sounds but the rocket man has cemented his reputation as the king of memes and everything that comes with it.

Doge, shiba and now floki…each of these projects hit the ground running with the mouth-watering gains they post. They do this despite not having any tangible use case…well, memes and ‘charity’ are good use case nowadays, lol. Anyways, ‘numbers go up!’.

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So, you are going to ditch your stable coins or some of your previous investments for the ‘next 100x’? It’s human nature to chase trends and the fear of missing out is a huge drive. Investors rush to these hot shots with hopes of reaping from the next possible gains.

This works, sometimes. It’s an uncertain market anyways and anything is possible, but being a successful investor hardly comes from jumping on trends. 50% gains, the rush kicks in. Speculators take the space and the project in question gets mentioned everywhere. The trend goes on, enthusiasts buy in with only little idea of the project is really about.

TA analyses, hypes from influencers, gains on trading pairs…these things are enough to sweep anyone off their feet. But regardless of how hot the hype blows, clever investors will certainly do their own research before buying in.

What’s your ‘hot shot’ story? Various tales will surround the rush. Successful or not, conditions differ. But…

Cryptocurrency trends are birthed by an idea or concept gaining relevance over time. Memes, DeFi, NFT…these ideas existed way before they caught the attention of the greater number of people in the space.

The real gainers in any case of these concepts breaking out are the pioneers who believed in these ideas and supported them with their time and their capitals. Being amongst the pioneer investors in any concept could fetch you over a 1000x gain as the case may be. This however, comes with its own challenges.

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Chasing trends definitely keeps an investor ‘restless’. Traders are meant to do this normally, but investors who buy tokens with a plan to hold on to them until the gains start coming are meant to exercise patience. Patience is a joke word for an investor chasing trends.

2-5X gains (or some terrible to manageable losses) and the hype dies; then unto the next one. A patient and more enduring investor who makes enough research probably already made some crazy gains from the same project and is still holding on knowing the hype could return with even heavier waves.

Chasing trending projects puts an investor in the way of higher risks and lesser gains as the hypes and trends are naturally meant to cool off at a point. Buy high, sell low…a common story amongst trend chasers.

Cryptocurrency investment gives room for countless opportunities, but reaping from them would require clever decisions and a lot of patience too. The more time you spend chasing trends, the more risks you’re exposed to and the more losses you may incur.

Depending on how far the project goes, a lucky investor might make tangible gains from chasing trend, but that only means that a patient investor who invested before the hyped kicked in already made way more. Well, it’s better to make little gains than to miss out entirely, but most times, things don’t work exactly as presumed.

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Dzoelx
Dzoelx

Drinking coffee and writing about cryptocurrency. Follow me on medium: https://cryptoscripts.medium.com/


Scripts
Scripts

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