At a larger scale, I'm not sure the difference with the NYSE or NASDAQ. I don't vote w/ any of the companies for which I own stock. I just hope I buy low and sell when it is much higher -- just the volumes are large enough that small players can't pump the value of the stock -- but reddit and TikTok has shown even this world can be gamed.
He is up on every new shit-coin, he spouts a little bit about the world changing proposition, he basically does it because "hes not missing out again".
His idea is to drop $100-$1000 as early as possible (like at the ICO or pre-buy whatever) and hope one of these things 100x'es.
Part of him knows this is a fools game, but he is "smarter" and still doesn't want to be left out yet again.
I don't know how many people remember it, but in the 1990s there was a fad for WWJD bracelets, with 10s of millions sold: https://www.mortaljourney.com/2010/11/1900-century/1990-tren...
In 1999 I met a guy who had missed out on a business opportunity around those. He had just bought into what he was sure was the next big thing: Y2K bracelets, which here stood for "Yield 2 King". He was sure that god was sending him this opportunity.
Even then I felt bad for him.
Companies can support higher valuations buy owning more stuff, if their market cap is lower than the stuff they own, then they’re clearly underpriced.
If a company starts paying out higher dividends due to higher profits, then their stock is worth more because otherwise the dividend repayment would trend towards zero (i.e. dividend payment per share ends up larger than the share price)
If a company is doing stock buybacks, then they’re using their profits to prop up the price of their shares.
But in all of these scenarios, the companies are producing profits, which are directly or indirectly used to pay for the increase is share value. Shitcoin on the other hand are zero sum, they produce no new value from their existence, they just store value and move it around a little bit.
Some degree of skill can be used to understand if a specific company is going to improve its situation long term via sound investments in new projects. You can look at companies stated goals and strategy and decide for yourself if those goals are valuable and if the strategy is viable. And thus make an educated call about future value (with appropriate error bars).
With shitcoins there’s nothing to analysis. They fundamentally don’t do anything. Speculating on shitcoins is just trying to guess what a disorganised mass is going to do in the future. There’s no reasonable way to gain any understanding of what their behaviour is going to be, and if it’s going to increase or decrease the value of the shitcoin, because it’s a disorganised mess.
Ultimately the value of a company present and future derived from the fact that it’s organised, and broadly predictable.
Shitcoin value isn’t driven by anything organised, or predictable.
Crypto forums use a lot of in-group language to communicate their shared belief of the crypto project (i.e. hodling, to the moon, etc., etc.) in order to demonstrate their belonging to the community and they summarily reject skeptics essentially as non-believers. It's a quasi-cult mentality but without a true individual leader. These forums then become echo chambers that serve two primary purposes: to continue purging skeptics and to repeat the crypto mantras over and over again without thinking critically. This is effective because it tends to attract people who may exhibit significant intelligence in other aspects of their lives. Where people really get into trouble is when they start thinking: "of course I'm too smart to get wrapped up in a dumb ponzi scheme, and this definitely isn't one."
This makes it really easy for the pump-and-dumpers to manipulate these people into making more and more risky crypto purchases.
Dear God, this really does sum up a lot of people running around trying to get rich nowadays.
There are also layers to the Ponzi scheme. The alt-coin is just the first one. Even if you cash out for a profit, you probably didn’t even sell it for fiat directly, but sold it for some “less risky” currency like Ethereum or Bitcoin. One might argue you’ve only moved from one a smaller Ponzi scheme to a larger one. But then again… trading across pools of risk is widely accepted as a method of generating wealth. So who are we to judge?
This reasoning worked a little better before the Fed raised its rates.
This is the case with all forms of gambling. I think that they know that the money is from others less fortunate. However, human nature seems to make us believe that somehow, we will be the lucky one.
None of that applies to the suckers who bought DOCK based on market manipulation, which is generally a crime. [1] This is more equivalent to Three-card Monte, [2] which may look like a fair game involving cards, but which also preys on the would-be smart.
That's a view very much encouraged in the cryptocurrency culture, and in the day-trader culture that preceded it. That with smarts and a little luck, a guy can get the riches he was destined for. The people who fall for it of course never ask where the money is coming from, because if they did they'd figure out it was suckers like them.
So when they see an ad that says, "ITS YOUR CHANCE TO BUY THE MOST POWERFUL CRYPTO COIN" they don't ask why the chance is specifically theirs. They don't ask what "powerful" could mean for a currency. They don't ask who's trying to convince them, or why the convincer can't even punctuate a sentence. They say, "Yes! It's my chance, just like I know I deserve!" And then they put in their engagement ring fund or the house downpayment fund or the money they borrow from family.
And very shortly that money ends up in the pockets of assorted assholes, who are now better funded for their next scam.