- He explains regarding ‘something is about to happen’ rumors.
- Influencers hype the price, and traders pay the price.
- The Crypto industry shall recover from this stronger than ever.
Everyone is worried sick about the events that transpired in the FTX saga and is now considering that the market might dip further, increasing the losses and causing more companies to fall for the contagion; more or less, bad strings of events are about to unravel in the crypto world. However, one of the greats of the crypto world and the creator of Ethereum, Vitalik Buterin, have different views; he shared his thoughts on Twitter, and here’s an explanation.
Many respected individuals from the crypto market suggest that BTC and other coins are about to face a dump in the coming weeks. However, Vitalik disagrees and explains that most of the things that “are about to happen” are rumors.
Lately, the crypto market has been seeing a downtrend which, if continued, could push the market further down, although if this downtrend is due to these said rumors is uncertain.
“I am hearing through the grapevine that something important is about to happen. Please recognize the fact that my elite social connection to people who are early to know things make me cool, and please help me validate my self-image of coolness.”
Buterin further explained a general CT pattern that he found insufferable.
He was referring to events where crypto influencers with huge numbers of followers share rumors, the said information coming from the person sitting at that spot with marketable credibility, is generally believed by people, and the accuracy of the rumor is ambiguous.
The problem with this situation is that many trades on them, which could lead them to incur heavy losses if the market moves in the expected direction. One example is the hype created around DOGE by Elon Musk, which pushed Glauber Contessoto to invest his life savings of $188,000 into DOGE; However, he reached over a million making him SlumDoge millionaire since then, the market has been down, getting him to a mere $300,000 approx.
Buterin wrote that the crypto industry is marked with similar situations, where people hype the price in one direction, but the market ends up going in another direction. Many influencer figures in the crypto world on Twitter can easily create hype around an asset, especially illiquid coins or during weekends. This created hype helps the influencers to increase their holdings, a false practice but ongoing nonetheless.
As per the data, Bitcoin is currently trading at $16,496, with 4.18% growth and a market cap of 316 billion.
Events like FTX are necessary for the market, as they help to identify the pain points and upgrade accordingly.