Mar 31, 2024
Crypto, shitcoins and casinos
5 min read
It is that time of the year when everyone is asking every other person what dog coin to buy. Bitcoin is at $70K and everyone is back to crypto to make some money. At the same time, we also have minted a brand new set of crypto teachers and traders who only trade in the bull market where every asset goes up all in a bid to sell you a silly course or access to a useless Telegram signal group.
Making money isn't bad in any way but we have done a very bad job if the only impression of crypto people outside the industry have is Las Vegas Sands but infinitely bigger, time to turn my $100 to $10K. I didn't know it was this bad until just last week when someone mentioned but that is what all crypto companies do. Help you quadruple your monies
For the most part, crypto is an unregulated industry, and thus there exists a lot of features and products in crypto that are exactly Casino-like or contain a shit load of Ponzinomics. Think of this: to IPO on the NYSE or any stock exchange really, your company goes through comprehensive checks, validations, and SEC making sure it is an investable asset for the general public. But in crypto, right from your grandma's basement, you can create a discord or Telegram group, launch the next Shiba INU without writing a single line of code or speaking to anyone and waking up the next day with your net worth at an all-time high because you have created a token with a $50M marketcap - with 10 of your anonymous wallets controlling 25% of the total supply.
Regardless of whatever anyone says or future regulations we get, the crypto industry will always be a financial market as that essentially underpins the very existence of crypto. So how do I think about it? Or how should you approach investing?
Lessons from the stock market
Buying random shitcoins is essentially the same as stock-picking in the traditional markets but worse. In trad markets, you can at least read their financial statements, and read the news amongst others but in crypto, it is:
- Name looks great. The name rhymes with Vitalik dog's name
- Community is great
- Social media manager of the token page is a meme god.
- Chad founder - no one knows what this means to date but the founders are almost always Chad
This already puts you at a disadvantage because you know nothing about the product/token. There is a random Telegram group or Discord with the actual plan on how to make the community look great on Twitter Reddit and others. Also, a plan to pump the token. Do not also forget the founder has 10 anonymous accounts and their friends have 5 other accounts controlling 30% of the supply. Or they have added a 5% trading tax.
In Casinos, people who play such roles are called The house. You buy the coin/token knowing fully well the devs have the edge, and your odds of making money are slim or in most cases nonexistent if the dev decides to rug the project or decide not to send you your tokens after presale is done. The house will always have the edge. Go play there every day of the year and they will always have the edge with you having the odds stacked against you. It is strictly by design!
Take a moment and zoom out, no one has ever lost money randomly buying Bitcoin or Ethereum over the last decade. But you know a thousand other people who have lost thousands of dollars trying to find the next DOGE.
Would there be a next DOGE? Probably. Will you find it and buy it? Most likely not. So why not invest in the market like a sane individual and not throw your money to the wind?
Even if you find the next DOGE, remember that putting your money in any every shit-coin is a zero-sum game. Most investors and business people say Your margin is our opportunity, With shitcoins,Your innocent 30-minute nap is an opportunity for someone to dump the bag on you. and send your coin to zero instead of you doing the dumping.
Ok, what should I do?
Not financial advice
Just buy Ethereum or Bitcoin. You probably already follow an investment schedule for the traditional market, simply fit your ETH/BTC purchase into the schedule. You don't even have to use a crypto exchange, you can find Bitcoin ETFs on your brokerage app and hopefully soon ETH.
Or you can find an asset that does something well, makes a lot of sense to you, and one you see yourself using. Read the whitepaper, use the Dapp, check the utility, and periodically buy them over the next few months and years. For most people again, this is ETH and the ecosystem around it like Optimism, TIA, and others. Not cat coins. Not Pepe coins. Not dog coins.
Final thoughts
You can treat the crypto market like a casino, buy every random meme-coin/shitcoin/cat coin, dog coin, spend the nights on Dexscreener chasing new token launches and analyze the name and website to find a nice narrative.
OR you can participate in the crypto market and treat it like a wealth-building machine. Historical data have always shown people who do this outperform fancy investors.
Not financial advice neither is this a clamor not to buy meme-coins or anything with your money. Maybe go have fun at the casino once in a while but if you do, treat it fully as a fun activity, not your route to build wealth just simply because it is a zero-sum game.
And oh, please don't try to convince me that you know a guy/lady who has made life-changing monies with meme-coins. There is a reason you always know a guy but it is never you or your friends.