My issue is that these people are smart, but not "I work at Blackrock as a day-trader smart". In Finance, there are laws against a lot of the easy wins, and now the professionals are entering the Crypto space they're going to run circles around the amateurs.
As in, it's easy to be the best in your local club, but it's a real wake-up call when you try out at a regional.
I'm not sure about that--or at least, the reality seems more complicated.
Terra certainly has an element of complicated financial dynamics behind it such that people who know a little--but not a not--may think it's the greatest idea since sliced bread, and get eaten by the professionals. I agree with you there.
But a lot of the crypto ecosystem seems to be much more mundane than that. As far as I can tell, there isn't any financial wizardry behind NFTs; they're just a sort of weird social phenomena (is it a game? is it a market? is it sports betting?) where you can buy a thing at a price that has no basis in reality except insofar as someone else might buy the thing at an even higher price. I think that many--most?--people "investing" in NFTs realize and embrace the greater fool theory.
But, importantly, it seems to me that a random yahoo might actually be better able to predict when the gravy train will stop than an elite trader. So in some sense, it's quite egalitarian (if also stupid)!
The financial wizardry behind NFT's is the wash trading. A lot of average people looking to get into NFT's simply don't understand that many of the 'success stories' they see of people making big money on NFT's are just wash trading trying to lure in the marks.
I mean, yeah, but wash trades aren't wizardry. Like, you go on eBay, it's always possible sale prices are someone selling to themselves and just paying the transaction fee. I hope/assume that's fairly widely understood.
The Luna "automatic peg" stuff is genuinely clever, but with genuinely surprising implications (at least for me, a casual observer/layperson) for dynamic instability.
Yeah I mean wash trading isn't that sophisticated, but it is wizardry to the people gettinf fooled by it. The algorithmic peg and other stablecoin shenanigans aren't necessarily that sophisticated either, and yet...
Still, 'smart' is usually not buying at ATH (even a local high) or not having a stop loss if you don't have time to stare at your screen all day and night. I don't know how many people 'woke up' to a 90% dump in terra and were too late to act; that's not smart and you don't have to be blackrock smart for that. This is not exclusive to cryptocurrencies of course; I don't have any, but I do trade other more traditional assets as total amateur.
But yes, I agree with you; they will be taking most the winnings because it's their job. That doesn't mean you cannot make money as an amateur. The real naive people can just send their money directly to the Blackrock bank account; saves a lot of stress.
I completely get your point, and you're correct, but there are layers to it, especially in crypto. And I guess that means layers of fishy stuff.
If your luna stop loss was done in UST, you are also effed, even if you took the precaution of stop loss, because the "stable"coin dipped. Not saying that this was "safe" to do, but there are surely people out there who did this and got screwed, and I guess that would feel terrible.
Absolutely; there are proud whales saying they lost millions and laughing (not sure why) but I am very sorry for the people who lost a few k$ and now are in deep shit because they didn’t understand what they were doing. The ‘how can this be; I will get my money back right?’ type of thing.
As in, it's easy to be the best in your local club, but it's a real wake-up call when you try out at a regional.