The Benefit Of Sunk Cost Fallacy In Crypto

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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


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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?


Reviewing A $400 Samsung Galaxy A72 (photos Included)
Hive's Scalability & The Compromise Of Commitments
Money: The Consequences Of Making The Right & Wrong Decisions
The Nigerian Economy: Monopolizing Incompetence
The Experiential Process of Understanding Money
A Case Of Theft On Hive: Here's Why Some People Choose Scam.

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17 comments
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If Bitcoin can survive from nothing to where it is now without its creator behind it. A Binance crash is far from burying crypto, yes it will set the crypto space back some years but it will continue to thrive nevertheless.

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I think we've learnt something these days and that's FUding from what we see on Twitter, but it'll take years for us to recover if such things were to ever happen.

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It certainly doesn't make sense to wait for the bottom, just keep stacking. Buying at 20k or 8k is not much difference imo.

The good thing about the CEXs blowing up, is that it encourages more self custody. The exchanges are leveraged... That should be obvious to everyone.

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Yeah, but people are scared of further loss, so they wouldn't incur short term loss, rather they'll.keep waiting for the bottom. However the sad part of this is that not a lot of these people really knows where the bottom is actually.

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The price speculation is kind of crazy and I have seen some people who were full bearish on crypto going back to saying it's a bull. However, I feel that relying on them is a fool's game and even a broken clock is right twice a day. I just ignore the short-term price and focus on long-term when it comes to crypto.

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Relying on these people is definitely a fool's game because their predictions changes with bearish or bullish trends. Like you've said, the long-term tends to matter a lot more.

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Crypto definitely has a mind its own. I think this is because it has matured over the years and is beyond a few sets of individuals/groups, sort of like it has found its own way. So crypto dying isn't entirely impossible but the likelihood of that happening is very very small. I think what matters is learning to go with the flow/trend of the market and not listening to people who make predictions that are wrong 99% of the time.

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I think you're right. Learning to go with the flow is what matters the most. I think there are people who would create predictions and Crypto these days don't tend to follow that prediction anymore, I think this is one of the reasons why I think it's important to self educate ourselves about crypto.

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If finance crash it will affect the market and many weak hands will sell but bitcoin movemement is more than just one centralize exchange, it is freedom

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Yeah, you're right, crypto is just more than one centralized exchange, but I think it would affect us, but again the market will recover.

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I love how you shared your thoughts about crypto and exchanges. So sad to hear from the news that some of the exchanges had already crashed. I just hope not for Binance. Perhaps I am on the longer-term and hoping for the best always. Have a nice time and take care my friend.

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The news about some crypto exchange coming is everywhere and has been affecting crypto in general, I like sharing my thoughts on it.

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Some people are really apprehensive about the crypto world due to lack of knowledge or because they believe that only conventional ways are better for making money...thank you so much for this article....though I am new to this but believe that I am heading for a better tomorrow 🤗😊

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