The hype following the MATIC token was enormous.
I decided to start this column with the obvious statement because, while the obvious is obvious to some, it may not be obvious to others. Yes, the word “obvious” appears four times in the sentence. I’ve decided to break all the rules of storytelling because it is important to emphasize the – obvious.
“Unnatural and inorganic growth is always followed by a swift and relentless decline,”
Said no crypto trader ever.
My condolences to those who filled their bags at $0.04.
The true fiction
Imagine if you have acquired a coin at the bottom (your vision blurs).
About a week later, the price of your new asset starts to rise slowly and you begin to feel good about yourself. You browse through the social media and realize that the community is hyping up the token more than Jordan’s flu game. “Alright,” you say to yourself, “let’s see where this takes us.”
Another week passes and things really start to heat up. Your asset has gained 25% in a few days. People are really into it and it seems that this time, you really hit the nail on the head. You browse the social channels yet again. The project has really caught the attention of the investors. People are flooding in and it created a huge buzz in the market. Naturally, you wonder “how long can this last?”
During the third week, the price literally exploded! The price is triple than when you first invested. Now, everybody is talking about the token. It’s “huge potential” and the “amazing technology” that pushes the network. You notice the mass FOMO hysteria that’s about to devour the greediest of traders. “I have invested $30,000,” you think to yourself. Yes, you were greedy while others didn’t believe. “These people really became greedy,” you suddenly realize. “And what did the smart trader teach us to do when people get greedy,” you repeat the lesson learned a long ago.
He told you to sell!
You take your business to the exchange and dump the tokens with a hefty, 300% profit (your vision blurs again).
MATIC token hype-loving community initiated the dump
Healthy growth is one thing and artificial pumping is a completely different story. By hyping up their bags, MATIC enthusiasts created such an atmosphere that early investors realized that the hype can push the price only so much. Especially those who invested big. Usually, large investments carry larger risks, and there are only a few of those who will resist pulling the sell trigger.
One huge sell order leads to another, and before you know it, those who gave in to the hype train get seriously burned. In other words, the community that supported MATIC brought more harm than good to the project. At least in the long-run. By pumping the price too quickly, they motivated the early backers to dump their tokens. Believe me, those who have enough to invest large sums didn’t get there by being naive. They were bound to leave at a certain point. That point was reached much earlier because of the mass hysteria.
Yes, these guys profited but there are three major and almost irreparable damages done by this kind of behavior:
- Early investors didn’t profit as much as they would if the rise was more natural.
- Many late investors got rekt so hard that they will be out of the game for a prolonged period of time.
- MATIC is labeled as a pump and dump cryptocurrency.
The great wreckage
Now, all of a sudden, people are in awe. They simply cannot comprehend how such a great investment turned to dust in a matter of a few hours. The same community which hyped up the MATIC token suddenly protests against everything connected to the project. Even more so because there is a great possibility that they had long positions with leverage on Binance which, naturally, got liquidated.
“MATIC is dumping their coins!”
“They are worse than Bitconnect!”
“Look at their workspace! We should have known…”
These are all things that you can read now after the party has ended. I understand that people losing money will never be able to handle their boiling emotions. However, the first step to take towards maturity, when something goes wrong, is to accept the fact that something was done wrong in the first place. The last thing you’ll ever see on social media is what you should be seeing first:
“Maybe we have overhyped the thing.”
Why do MATIC token devs feel the need to apologize?
Still, acceptance is the path to maturity. And the cryptocurrency market looks far from mature from my perspective. At the moment, everybody feels that they have to get involved in the MATIC drama. Even the popular CZ took the keyboard to indulge the investors and the MATIC team is trying hard to reassure the community that the price is going to bounce back.
This time, please, think before you act. The team doesn’t know if the price is going to bounce back. In fact, probably even this pump surprised them as well. It is highly improbable that they’re coming back stronger than ever. At least not in the near future. Moreover, they might not even be aware that they have to thank their own community for what happened to the price of their token. Still, the MATIC token development team feels the need to explain themselves and literally apologize to the community. My opinion is that they don’t have anything to apologize for. At least not until Charlie Lee does the same to all Litecoin (LTC) holders.
Since I really don’t like people to lose money on bad investments, take my advice. I’ll state the obvious (yes, again). Please, don’t buy the peak. Buy the dip. No matter how long you have to wait for it. And don’t overhype your investments. That way you not only help yourself but the community and the project as well.