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Unlike traditional markets, where valuations are rooted in fundamentals, crypto markets are primarily an attention economy. Capital gravitates towards the most compelling stories, not necessarily the best technology. This creates what some call an attention loop — a cycle where hype begets headlines, headlines breed more attention, and increased attention drives prices higher. Learning to spot these narratives early offers investors asymmetric upside, rewarding those who can anticipate the next big trend before it hits the mainstream.
Historical Context: The Cycles of Narrative
Understanding current narratives requires a look back at crypto history. Different hype cycles have shaped the market's emotional landscape: