Survivor Bias in Crypto (And why you think you will make Millions)
Ever heard of friends making thousands upon thousands of dollars in crypto? Especially if you just hear about it for the first time, you might of been introduced to crypto by someone who has won big in the crypto markets. This is an example of survivor bias as people who made money in crypto are more likely to talk about it, whist those who lost money don’t bring it up.
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Cryptos are amazing as long as you are able to think long term.
The problem with crypto and the people who are new to this is that they invest some money and than expect to get rich the next day. They want to make it and they want to make it NOW!
Boy, are they in for some disappointing results with this thought process. Like with everything in life, good things come to those who wait. HODL and profit.
longterm is indeed what people should have in mind when getting into crypto and a good understanding of what made Bitcoin special in the first place. A decentralised, neutral,borderless, zero counterparty risk form of digital money which operates like tcp/ip. (money as a network protocol)
Most people don’t get how important that is, as that very fact could make banks and fiat money obsolete. People that don’t believe so, misunderstand the concept, many people 99% of the world still seems to misunderstand.
This is additionally an issue when you take a gander at CoinMarketCap as the majority of the coins there are just those that have survived so you truly don't get an opportunity to see that high level of undertakings that really come up short. The site likewise does not track the ICOs that never accomplished their issuance objectives.
I created a website (still in beta) that dosn’t look at marketcap, every view added to my website is one that adds to transparancy. I am building a steemit community that does research into crypto assets and measures their properties rather then just looking at marketcap.
If you want to read more check the posts in @oudekaas.
This is also an issue when you look at CoinMarketCap as most of the coins there are only those that have survived so you really do not get a chance to see that high percentage of projects that actually fail. The site also does not track the ICOs that never achieved their issuance goals.
The issue as well is that coins that have more visibility, CMC is in the top 400 most watched websites in the world, get hyped to massive proportions, for instance Bitconnect arrived in the top 10 for good reasons, CMC had a lot to do with it.
This is why I set out to create a grading website based on the steemit community and based on twenty+ properties to get rid of hype fud and create a more accurate ranking system.
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Sure this is true in some cases, but the vast majority of people who were in early (and have seen their assets rise significantly) don't talk about it. The reasoning is simple, it is a major security risk. Be careful who you seek advice from if you are new in the space.
I see people using real world facebook identify to talk about how much they made, for sure the tax man is watching
sooo many reasons not to make posts like that.
Some of this is good advice like periodically taking profits and thinking in satoshi levels, but a lot of it is complete nonsense:
Says "don’t take peoples advice just based on the fact they made good money and were in crypto for a year", then expects people to take his advice from someone who just got into this 3 months ago and bought at peak valuations...then lists a bunch of obscure microcap coins and claims that with this he "will make a million this year and I say that with more confidence then anyone shilling you". Here is an actual protip to newbies: Those coins are his bags and he wants to unload them on you.
He doesn't seem to understand what market cap actually is, or what variable change it or how those variable change over time, thinking its simply the amount of money invested in a coin. He gave the example of Stellar and how "for it to double it will need another $6.5 billion", when it doesn't need anywhere near that amount of fiat to double. He also complete disregards the second variable of float distribution, which for a coin with only a tiny fraction of its total supply released like Stellar will be highly impactful.
He claims that Twitter accounts is his biggest resource for learning about crypto, when its probably the worst source. Really only newbies buy based on what they read from shills on Twitter. Even worse he seems to think someone is a good source because he went back in their post history and looked if they praised coins that went up. First of all these people delete the calls they get wrong and leave the ones they get right to sucker in people like OP into buying their low market cap coins. Second, this is classic survivorship bias and even he says himself that the market went up x42 so tons of people called bad coins at lower prices. Third, Twitter is filled with shill groups who shill low market cap coins which widely mooned during the dumb money alt coin run late 2017, when OP entered and people like him bought them up. When he says "most successful guys with highest success rates usually call the same coin", what he doesn't realize is that most of these are organized accounts that pump shitcoins to people on Twitter and then dump them after they moon.
He equates how much someone else has made on a coin in a short period of time to that being a good investment prospect. This makes absolutely no sense. In fact this type of thinking is exactly why so many obscure PnD coins exist.
Says "STOP buying peoples tops, let the noobs that come into crypto buy YOUR tops", not realizing he's a newb who bought other people's tops.
Believes that at the same time this is a zero sum game and that "everyone made money in 2017". He claims that it is a zero sum game and then advises new inexperieced people to trade rather than hold. Well if its a zero sum game then the new people are going to lose money trading with the experienced traders and whales.
Apparently there will be "bull market coming up in the next couple weeks or months" yet at the same time "you can’t predict if it will dip tomorrow, next week, or next month".
That portfolio is ridiculous, especially because he himself says "Crypto is not just vaporware", then lists what is mostly vaporware shitcoins and third world ICOs. Zero risk management, zero safety margin. This is an awful portfolio for a new investor, most of those don't even have any tangible use case or product whatsoever.
thanks for sharing your views . really impressive
you're welcome
Dear, Article was readable but please make more clarity...
Exactly, people are think crypto huge earning source when i enter in the crypto market i will make a million $ within days but they don't no about crypto they have a dream to do that but at the end result is against of them and they lose the fun so keep remember about market. This post is very helpful for new trader @boxmining your opinion dude
Great comparison! Patience will pay off in the long run!