Cryptocurrency trading - Bulls, bears, whales, pilot fish and just downright weird stuff (part 2 of
In the last post we offered a brief interview to some easy to spot behaviors in cryptocurrency trading. This post presents additional behaviors, again, without intending to be exhaustive or organizing them in a framework.
CREATION OF A NEW DIALECT
Any new self-respecting space would not be complete without its own dialect. Cryptocurrency trading is no exception, and there are many new terms and even verbs.
HODL’ing - The act of holding on to your cryptocurrency position, instead of succumbing to the temptation of selling it… even though in many cases selling is a rational, defensible behavior. And yes, it’s spelled HODL, not hold.
Shilling - Promoting a crytocurrency as a good investment to sway others into investing in it, motivated by personal gain. “Hey guys, have you heard of xyz coin? I just bough 50,000usd worth of it, it has such a solid founder team, plus my friend who knows a guy who is in contact with a whale told me that…” — you get the picture.
And, of course, it’s possible to borrow terms from today’s parlance - such as when you’re having massive FOMO and that prompts you to invest on the new crypto-currency du jour.
More interestingly enough, you will see tons of cryptocurrency memes. Here’s a nice list of animated GIFs if you’re interested.
As most traders would like to quickly make some profit by following the movements of whales, thousands of communities and user groups have formed. WhatsApp and Telegram ones are particularly popular since most people already have the corresponding app in their phone and it allows for immediate interaction, which is critical due to the time sensitivity needed to respond in time to the currency fluctuations. Although there is no official taxonomy, we could loosely consider them in the following categories:
-Signals groups: Groups where users pool all the information they have obtained from their own research, tip-offs, analysis, etc. The idea is that the group’s collective information gathering and intel generation will yield better investment recommendations than a lone wolf could. These groups in most cases are open, or they can be accessed by having a member invite you.
-Whale coordination groups: Groups where the pump and dump schemes are organized so that all members invest at the same time and exit at the same time - leaving those not in the group trailing their moves (the ‘pilot fish’ we talked about earlier). These groups are private and getting in is a lot harder, since the group members have no incentive in letting someone else in - unless the new participant has investment capabilities that allows them to increase the impact of their pump and dump schemes.
-Paid groups: There are groups where you have to pay to get in in order to have access to their ‘picks’, supposedly backed by intel coming directly from whales. Then again, sending cryptocurrency to some guy’s wallet address on a different continent , trusting he’ll add you into a WhatsApp group, trusting that the info there will be valuable for you to trade with — well, let’s just say it doesn’t always end well.
JUST DOWNRIGHT CRAZY STUFF
Also, there’s just a lot crazy stuff happening around Crypto. Want a new lambo (aka the holy grail of the cryptotrader)? Sure, KuCoin offered one to the contest winner.
Death threats? Sure, made public like this one, or more obscure ones, like the rumor that there was a price on the head of the Bitconnect founders set in the dark web once it became apparent it was a Ponzi schemethat blew up. Losing all of your life savings? Check. Losing your money through some elaborated social engineering and an incompetent service provider? Of course! And more recently there’s even a John Oliver show episode for this.
There's many more interesting behaviors in this space - and I'm fascinated by having a great seat to many of them... I'll just be careful with my own investments or this will be an expensive form of observation.