Since the beginning of crypto a decade ago, the purveyors of FUD have used hyperbole to heat up the news. It’s always been part of the scene in crypto, whether the market is mooning or “Plunging off a Cliff” (an actual headline).
But we’ve seen this phenomenon intensify so much recently that it’s emotionally grueling to stay informed. The only variety seems to come from the list of words that are synonyms for disaster.
The intent could be to create clickbait or manipulate the market. Always, though, the idea is to amplify the emotion around a story so it exceeds what’s warranted by the facts.
Being conscious of FUD, taking apart the information presented and comparing it to those facts is informative and offers a deeper understanding of the role of emotion in any market. It can also give us perspective — and take the sting out of this particular market.
Here are two stories that look at the one-year anniversary of Bitcoin brushing up against $20,000, compare it to today and declare the crypto market a catastrophe.
The first focuses on the fact that the 80 percent fall this time (it’s happened before — and more) accounts for a much larger chunk of market cap.
Well of course. The market cap losses are the biggest they’ve ever been because Bitcoin was at the highest it had ever been.
The other story looks at the same drop in price, looking not at the distance in time from the all-time high but at the fact that this is the lowest low in a year. What?
We’ve plunged off this cliff before — just at a lower altitude.
And the plunge was followed, eventually, by an all-time high in a cycle of increasingly higher all-time highs. That’s what we expect this time because, clearly, what we’re seeing is the spasmodic move of a thing that, if you look back over its entire journey, is on a path ever upward. It’s a path we think will take Bitcoin to its place as the global reserve currency.