The Benefit Of Sunk Cost Fallacy In Crypto

CZ is a huge figure when it comes to Crypto many people think that if CZ pulls an SBF then crypto would be dead and buried, I do not blame these people, however, let me paint a vivid picture for you. The principle of causality in crypto is functional and real to a sophisticated level.

For example, a dip in price would create more dumps, and a boom in price would create buys or hodlers. In reality, this doesn't make sense when you begin to look at this effect of causality from a real-time investment point of view. People are supposed to be buying when the price is low, then selling when it's high, but Crypto hasn't gotten there yet.

Why is this?

The reason I think so is that we might need about fifty recurrent bull runs for people to believe that the price would drop during the bear market and inevitably recover when it's the bull market. A lot of people still create this Ponzi-Esque feeling around crypto, especially when they're used to listening to established billionaires like Bill Gates, (who made their wealth through conventional means) saying things about crypto when they haven't even studied the technology.

So even if crypto has managed to create a clear vision, people would still think the technology would fail if some powerful individuals decide to exit scam. So it's quite easy to say crypto would die if CZ turns out to be a villain at the end of the day.

Big Figure, Big Impact Mentality

Now before SBF happened, a lot of people wouldn't create this stance, but then SBF happened and it's not rocket science to feel that, if this was CZ, the capitulation would happen on a bigger scale, never to recover again. But, this is just people speaking as a result of splinters of FUD that they're reeling from. The worst-case scenario is that crypto would take a major hit and would emerge from the ashes a few years later.

This is not where I'm going. The point is that many people have been pointing fingers at CZ, while I don't doubt he's got skeletons in his cupboard, I feel he's suffered from unfair scrutiny because of the aftermath of FTX, I mean, a lot of people took their money off binance, because of the fear that all CEXs would potentially pull an FTX, while this is the fear of loss and it's logical to seek safety, I feel that the FUD that sold about CZ was unfair.

But it's an unfair space in crypto

The Aftermath On Centralized Exchanges

Recently, he's come out to tweet about following the investment stance of some questionable people in crypto. This points to the fact that crypto has a mind of its own, irrespective of how accurate charts might seem. For example, a lot of influencers have said the bottom will be 8k for BTC and before we see any sort of green, it might take months if not years.

I mean the people potentially following the predictions of these guys would never have a mind of their own. While I'm not totally saying we've hit the bottom at 15.5k, I'm saying that even if we go back to 14k, nobody saw the small pumps in the past few days coming and this has shattered 99% of previous predictions in the past one month

This is exactly why CZ made that tweet

These shameless influencers know how to create baseless predictions based on FUD and FOMO, and have people sheepishly follow their predictions rather than grow a mind of their own. In CZ's previous tweets, he told people to ignore the FUD and keep building, but not a lot of people would listen and now, some people have missed out on potential profits because they were waiting for 8k BTC.

Let's not forget, the situation with crypto is still dire. For example, the SEC might still come for centralized exchanges after they've finished dealing with SBF. These events and changes in situations are some of the things we should personally research, before making assumptions.

Whalish actions indeed drives the market,

.......but if we become a bit logical and analytical in our decisions, then allow the Market to do its thing, we might not be the biggest winners when the time comes, but we'll surely not be the biggest losers and this is supposed to count for something.

A lot of people are sunk cost fallacy-ing into hive and this isn't as bad as it seems. For example, some people have invested money on hive and as time went on, they've gone on to invest their time, skill, effort, and commitment.

A Case Of Sunk Cost Fallacy

However, a bear market situation like in 2018 happens, and instead of just selling at that low price, they decide not to because they're calculating the non-monetary value they've added overtime and it it's not worth sacrificing all that value, so they decided to ride on, then 2021 happened and they're happy they made that decision.

A lot of people need to sunk cost fallacy into crypto in general, because it's important to calculate the non-monetary value we've added over time, when this happens, what we do is look at the futuristic profits we might eventually gain especially because the price we might have now isn't enough to pay for all that effort and time spent on research and all that. Crypto has a mind of its own, beyond predictions and speculation, and the events in the last few days should have taught us this.

Interested in some more of my works?

The Benefit Of Sunk Cost Fallacy In Crypto

Big Figure, Big Impact Mentality

The Aftermath On Centralized Exchanges

Whalish actions indeed drives the market,

A Case Of Sunk Cost Fallacy

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