TIL: Rumours seem to be the invisible hand that regulates the crypto market

It is like those hoaxes flooding FB and Wazzap now and then. Not only is the information in them highly questionable, it is just ment to trigger fear. And of course to create a chain of endless resharing. It is beyond fake news. Because just checking the facts will prove that it is the bull his shait and then some. Still it seems a strong effective trigger to manipulate human behaviour. Or just a way to effectively shut down our gray thinking power and let nature take over. Back to the times where we almost had no logical thinking. And we survived by fleeting, freezing or fighting. Under our big massive brain there is a small part in our head that works like that. It will shut down the biggest energy consumers, in effect we become slave to our urges. Some call this part of our survival kit the lizzard brain. It will pump up our adrenaline levels, it will not help us to build anything usefull though. It is our inherited animal thrive to survive.

So, what has this to do with the recent market crash of all those crypto's? Well, as far as I came to understand, or 'Today I Learned', it was actually triggerd by a rumour about the Chinese government wanting to regulate Bitcoin. That gossip got spread by some who thrive on sensation, because the traffic for their websites needs to grow, or something like that. Advertisement pays bills, so sensation spreading it is. In fact the talks between the Chinese government / Central Bank and some Chinese based exchanges are on a regular base. Just to keep things within the limits of the Chinese law. You can agree with that or disagree, but it seems these exchanges just have these open talks with the regulators so they can offer a service to their customers and make a profit. It comes with the territory, I think, it's pure logic. But still, the rumours were spread and there it was, the famous invisible hand that regulates the market...

Now were are my anti-cynica pills?

"Don't panic, don't panic...", it was some line in a TV comedy show called "Dad's army", corporal Jones, the butcher of Warmington at Sea, would use it when something unforseen happened. The joke being that he actually was the one in panic. Somehow it looks like the Artificial Intellingence trading software used worldwide is able to mimic this basic survival instinct of humans too well. 'It' being connected to the news feeds that spread the sensation of fear like wild fire. A lot others following these news feeds like, eurm, sheep, making it even worse. "It was all over the Social Media!", so then it must be true right? Just like that time when a Bitcoin theft at a bad secured exchange could cause a major market price crash. To the realistic thinking amongst us that actually makes no sense. What would make a change, by reasoning, is when SegWit would get consensus. Now that makes sense to me anyway. And no, as far as I know there is still a long way to go before most miners are going to use Bitcoin's SegWit. It has just past 26%, but do not take my word for it, check SegWit dot Co for yourself.

Now the pace at which the crash happened at such a huge scale can only mean it was triggered by AI trading software and the trailing traders. Yes, there probably is Artificial Intelligence software that actually scans 'news' feeds as a part of their decission making. Normally not blindly going into a human behaviour mimic of panic, but when there is a flood in a lot of 'news' feeds, it would follow that pattern. Just when you want to find something in a lot of data that is mainly 'known' noise, you would look for the odd thing standing out. That is the way intelligence would use it to filter for the unusual. This sensational incorrect 'news' about China supposed to regulate Bitcoin, it can not be done by the way, was an anomaly because it got so explosively reshared all over the social media. Like a virus infecting, very effectively, all of the crypto markets. The AI in panic, selling like there was no tomorrow and the trail traders following that pattern like crazy. Many still licking their wounds now, I guess.

Stay real, check facts and keep your cool

It is kind of crazy how gossip and rumours are able to become the magical invisble hand that regulates the market. But, that is not even to blame those bad so called 'news' spreaders for. After all, we all have our own gray matter that can make very good decisions based upon knowledge. It is only when that 'animal' part of our brain gets triggered by fear that we are mainly going into survival mode. No healthy choices will come from that when we are not really facing danger, like standing at a cliff, or facing a wild bear, or whatever is the real danger. Also, most of these bad rumours have to do with the centralized reality. While exchanges owned centraly by a company could be regulated to register their users and how much crypto's they trade and own, in a decentralized virtuality that is impossible... Think about that for a while, maybe that will help the next time the 'centralized' reality tries to use sensation to spread rumours, in effect to cause panic. Could it be that the centralized system is actually the one in panic of losing the monopoly it had with the way it created money?

Now, this made me realize that even so called 'free' media is still centralized, and still will have a lot of advertizing on their sites. That shows the most and utter shait, where one has to plow through just to get to another piece of sensational 'news'. And no matter how 'they' claim to be 'independent', a weird word in itself, while it actually would make sense to state they are substantive. In this life we are always dependend on others, on situations, on clean air, that is a fact. Anyway, so far only Steem, the Social Media Platform on a Blokchain, can claim to be really substantive, probably giving you the best source for 'news'. Even though there will be those who try to use sensation to scare you into whatever survival panic. But we have the reputation value at here to fix that, if needed.

In the meantime I kept my crypto reserve, mostly, luckily I just had payed some bills when the prices were high. And today I bought some Zcash, as it seems to be quite stable and has a big market potential, but that is me speculating, remember, it is a gamble... And I only buy and sell manually. It is all from a gut feeling I guess. And of course the tea leaves, the crystal ball, the role of the dice and the three pigs, a bucket and some truffels. But so far I'm stil stuck with only a bucket. Yes, it is important to have a laugh now and then, otherwise it could get all to grim, all to fast. And when the right time has come I will move another 30% of my crypto's towards Zcash. Still only putting in what I'm willing and able to risk.

Have a good one!

artwork 'Neurotic' cc-by-sa @oaldamster