Humans have been given the gift of emotions. Humans have been given the gift of logic.
Both of these are blessings. And both are curses.
Cryptocurrency spells out these facts in crystal clarity.
Take the latest Dogecoin chicanery as a case-in-point. And, full disclosure: I love Dogecoin! When I was too chicken to do anything with Bitcoin (as now), the dogers were welcoming and forgiving and fun. I learned crypto from doge.
Yet, Doge is susceptible to the blessings/curses of humanity.
When doge rockets up based on a Tweet, or a meme, or a phrase, or a tweet about a different coin, or an action about a totally unrelated stock other than it's also on Robinhood...it's emotion that's driving it. "Let's do this!" the crowds cry. And Doge jumps.
Amid the hootenanny, there are party-poopers who speak sobriety. Logic is so unfun. Reddit user @TrueSpins wrote this post on Feb. 7:
The tldr; is that the Doge's emission rate is astronomical, thus the inflation rate is as well. Despite the 1 Doge = 1 Doge cheer (which is fun and I jumped in on it myself when I made the chart below), any exchange value of that 1 Doge has constant downward pressure against it. In other words, 14 million Dogecoins dropped daily into the ecosystem means your 1 Doge is constantly being devalued. Sorry.
But, hey! Doge is fun! :)
Casualties of LDTC
I don't want to pick on Dogecoin. I love Dogecoin! It's got a cool doggo and I love doggos! Woof!
So, let's talk about "Let's Do This! Coin" (LDTC) instead.
The emotions that go along with the "Let's Do This! Coin" (LDTC) mean people will get hurt. Here's how LDTC plays out:
- Let's Do This! Coin's chart is flat for quite a while.
- The logic is clear: the constant pressure of a deluge of coins flooding the ecosystem won't let LDTC gain value.
- Then, someone famous puts out something, anything on social media. The more nebulous the better. Maybe the famous person tweets out, "LDTC = moon". The emotions kick in. Logic is sidelined. It is on!
- TikTok picks up on it. Subreddit /r/letsdothiscoin picks up on it.
- The mantra becomes, "Let's do this!" and "LDTC to $1!" and "LDTC to $10!" and "LDTC to da moon!!!!!!!"
- And, LDTC indeed begins to moon.
- For one day. Maybe two.
- Latecomers, who just heard about LDTC see it mooning. Everybody on TikTok/Twitter/Telegram/Reddit be sayin' "Buy dawg! Let's Do This!" "Oh crap!" the latecomer's say, "I gotta buy me a bunch of LDTC right now! To da moon!!!!!!!" They buy.
- Some in the LDTC community allow logic to creep back in. Two days is a long time to keep the emotions up, right? These snakes-in-the-grass see great gains. They sell their coins and take profits.
- Sellers are quickly shamed by the greater LDTC group. How dare they take a profit? That is not what LDTC is about!
- With the sales, LDTC quavers at the top of the chart for a brief moment. Confidence quavers.
- Then LDTC quickly crashes.
- And, the latecomers are rekt, as they say in crypto.
- Return to #1 above, repeat.
Be careful out there.
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