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ChainLink Bubble [THREAD]
For months we’ve watched $LINK grow exponentially. It’s price has shot well beyond its intrinsic value through DeFi hype, and greed.
This thread will touch on some points I think all holders should read before falling victim to the Bubble.
For months we’ve watched $LINK grow exponentially. It’s price has shot well beyond its intrinsic value through DeFi hype, and greed.
This thread will touch on some points I think all holders should read before falling victim to the Bubble.
First let’s discuss how bubbles are formed:
A bubble is where investors buy an asset, not for its fundamental value, but because they plan to resell, at a higher price, to the next investor.
A bubble is where investors buy an asset, not for its fundamental value, but because they plan to resell, at a higher price, to the next investor.
I’m going to go over several aspects that take place during bubbles, and are present in #ChainLink (along with many other DeFi projects):
1. Extrapolation is projecting past data into the future on the same basis; if prices have risen at X rate in the past, prices will continue to rise at X rate forever.
Extrapolation causes investors to overbid risky assets in an attempt to capture the same return rates.
Extrapolation causes investors to overbid risky assets in an attempt to capture the same return rates.
2. Herding is an aspect of behavioral finance.
It is the tendency humans have to do what the rest of the herd is doing even if as an individual, they know what they are doing is irrational.
The dot-com boom is another example of herding.
It is the tendency humans have to do what the rest of the herd is doing even if as an individual, they know what they are doing is irrational.
The dot-com boom is another example of herding.
3. Celebrities begin shilling the project.
Notable people are often paid to advertise the project near the top, when they likely bought much lower.
@stoolpresidente is a prime example of this. Notice how he waits after it’s up 40,000% before telling his 2M followers to buy.
Notable people are often paid to advertise the project near the top, when they likely bought much lower.
@stoolpresidente is a prime example of this. Notice how he waits after it’s up 40,000% before telling his 2M followers to buy.
4. Mania Phase
Media shouts far and wide. Average investors catch wind that something big is happening and they want in.
The price starts to go up, and inexperienced investors think it will keep going up forever. Your parents are now listening to the band.
Media shouts far and wide. Average investors catch wind that something big is happening and they want in.
The price starts to go up, and inexperienced investors think it will keep going up forever. Your parents are now listening to the band.
5. Complete Denial.
This is seen by most Link Holders. They will refuse to sell because holding in the past was successful.
We remember vividly what happened to the same people who did that during the 2017 ICO bubble.
Stuck bagholding forever. Shame...
This is seen by most Link Holders. They will refuse to sell because holding in the past was successful.
We remember vividly what happened to the same people who did that during the 2017 ICO bubble.
Stuck bagholding forever. Shame...
6. No Exit Strategy
If you’re trading, it’s extremely important that you have both an entry and exit strategy.
I’ve noticed with bubbles, no one has a (realistic) exit strategy. They keep waiting for it to rise, then will eventually sell when it’s plummeting.
If you’re trading, it’s extremely important that you have both an entry and exit strategy.
I’ve noticed with bubbles, no one has a (realistic) exit strategy. They keep waiting for it to rise, then will eventually sell when it’s plummeting.
7. Marketing
Investors eager to pump their bags will often exaggerate things.
With LINK they often brag about dozens of partnerships.
- Google Partnership turned out to be fake. Nothing more than a tutorial.
- Most projects they are partnered with are DeFi scams.
Investors eager to pump their bags will often exaggerate things.
With LINK they often brag about dozens of partnerships.
- Google Partnership turned out to be fake. Nothing more than a tutorial.
- Most projects they are partnered with are DeFi scams.
8. Coin Supply Concentration
Considering 70% of the coins supply is held by 9 whales, it’s likely they will begin dumping on Investors once they’re ready to take profits.
You don’t want to be buying/holding during this. It happened to most other coins in the past.
Considering 70% of the coins supply is held by 9 whales, it’s likely they will begin dumping on Investors once they’re ready to take profits.
You don’t want to be buying/holding during this. It happened to most other coins in the past.
I hope this thread could explain my rational as to why I think #ChainLink is in a bubble.
We will see within a few months whether I was right.
Predicting the top is almost impossible, but we know how it will end. Once the hype subsides, panic will take over.
We will see within a few months whether I was right.
Predicting the top is almost impossible, but we know how it will end. Once the hype subsides, panic will take over.
