Betting Against the Market: Stop Chasing Airdrops

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People love airdrops.

I love airdrops.
You love airdrops.
We all love airdrops.
Free money.
Hip hip hurray!

The big problem with airdrops is that they are almost never worth it.

As far as markets are concerned, doing what everyone else is doing is very often the losing strategy. Because people love airdrops so much, chasing them becomes the losing strategy. We've seen this play out directly on Hive multiple times now.

The airdrop in question is usually worth so little that dumping during the middle of the hype cycle becomes way more profitable. Hive had a double airdrop snapshot on January 6th for Ragnarok and and SPK (Larynx) tokens. Now that the markets are up and running we see that those tokens can be bought for like 0.01 Hive. Because these airdrops were 1 to 1 this makes the calculation very easy. Theoretically these airdrops boosted the value of Hive accounts by 1% each, so 2% total.

But what if you had just dumped in the middle of the hype-cycle?

If instead of trying to get as much Hive as possible for the airdrop we had simply sold as much Hive as we were comfortable with in the $1.40-$3.40 range (DCA) during November, December, and January, we would have made a killing worth way more than the measly 2% that the airdrop was worth. Then with those profits one could easily buy as much as the airdrop as they wanted from other people that dumped after the market opened up.

The exact thing happened with CUB.

People stacked CUB for the Polycub airdrop, when really they should have sold when the market cap of CUB was over $5M (a consistent resistance point since inception). By avoiding that airdrop entirely and rolling it all into buying the deflationary xpolycub asset up front anyone could have x10 their money within a matter of days.

Yeah but that's just gambling, right?

Not really. The mechanics of these things definitely have a pattern, and whenever we have a chance to bet against what other people are chattering about, that's almost always the correct answer. People who talk about what plays they are going to make and are all hyped up and telling their friends... are almost always the exit liquidity that get dumped on.

My friend approached me about Shiba Inu on Discord and I told him not to buy. He bought anyway. Weeks later I checked that conversation in Discord and noticed that he talked to me literally the exact same day that Shiba Inu had peaked at all time highs. It's remarkable how well the market can extract value from people and turn them into exit liquidity right when it needs to.

My friend also wanted to buy that "Let's go Brandon" meme token that got rugpulled and crashed to zero and is now being sued. Luckily I controlled the money on that one and I was like "I'm not paying an $80 gas fee to buy a couple hundred dollars of this shitcoin". That answer was good enough. Bullet Doged.

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I'll be the first to admit that I bought SPS for the first time at the peak of the hype cycle (80 cents). Again, should have been obvious when Splinterlands' governance token had a higher market cap the Hive does now... that maybe it was overvalued and guaranteed to dump. The hype was real, so I threw like $1000 in and lost most of it. Lesson learned: bet against the market. Bet against the hype.

Stability & Elasticity.

Unfortunately there isn't a single crypto asset out there that understands the importance of lowering the value of the token when it breaks targets to the upside. That's the only way to keep a currency stable, and crypto has zero stable currencies. "Stable coins" don't count, especially if they are pegged with dollars in a bank. Relying on the legacy system to pay up is not a valid long term strategy. That's the entire reason why crypto exists in the first place: there's no trust left in the legacy economy. A bank run will destroy all the stable coins pegged to dollars in a bank in an instant sooner or later. The perceived security of these tokens is a complete misnomer.

Algorithmic stable coins also do not count because they don't offer high enough yields to compete with the average gains of legitimate crypto assets. There's no reason an algo stable coin can't provide 100% APY year over year. If Bitcoin can do it, there's no reason a more stable asset can't do it as well. In fact just the property of the asset being more stable is a highly valuable variable that makes it worth more money to investors.

Stop timing the market: it's about time in the market.

This is another reason why algo stable coins with 100% APY will take over eventually. If anyone can enter the market at any time knowing they're going to make 100% returns after a year, that's a better investment than Bitcoin because Bitcoin only does that on average with massive volatility swings all over the place. In fact, a stable asset really only has to provide 50% APY to take over, as many investors would easily take that 50% cut for the free win. Investors like to make consistent gains, thus providing stability to an asset with high yield is an easy way to retain users and to eventually go viral. This "only up" nonsense is going to get laughed at in ten years.

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Conclusion

Always bet against the market if you see an obvious opportunity to do so. It's usually pretty obvious because the hype in the air is infectious and you'll have to force yourself to not do the thing everyone else is doing. Have some self-discipline and do the opposite for once. You'll be surprised by the outcome.

In relation to hyped up airdrops the opportunity almost always arises a few weeks or months before the airdrop. Price of the underlying asset goes up right before the aidrop; that's when you sell. Buy back in weeks or months after the airdrop when hype is gone. This is a winning bet like 80% of the time.

At the end of the day things like airdrops create huge rifts in demand and supply. People want the airdrop, so there are way more buyers than sellers, pushing the price up and making the underlying asset volatile and unstable.

The market has a way of paying users who actually provide value to the network. Rather than do what everyone else is doing and hording tokens, provide liquidity to the market when the market needs it most. You'll be rewarded financially in the end on average.

We still seem to be a long way away from making these currencies elastic and stable. Be on the lookout for networks that finally accomplish this goal. It will be a big deal when it actually happens. With any luck and a lot of hard work perhaps I could build it myself. That's the goal anyway.

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There were several cases when I was not disappointed in the airdrop), but, over time, I stopped treating it as something important, something worth fighting for, if they are, it's good, but if not, then you need to occupy your brains with something else, more important).

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I'm not one to really get excited about airdrops. I mean they help because I'm a hodler in all cases so it gives me a free in on the platform to take part in it and test it out. But to be honest the SPK airdop was totally worthless I have to say. Q1 in and for the most part you still can't use the miner tokens unless you boot up your own node which pretty much no one knows how to do. Polycub was pretty much expected to fire dump because the first two months it was just being pumped with massive amounts of printing. That's finally about to dry up a bit here soon I think this week which we might start seeing a turn around in value stacking on the price there moving forward. Even goes for SPS tokens that airdrop is coming to a end in about 2 months and with it a nearly 60% reduction in SPS being minted and demand for them going up due to what they are offering. It's a balancing game of use case, demand and how fast it's being emitted. Polycub pretty much repeated CUB but at a much faster rate because the printing was nearly 2x that of Cub launch.

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Most of the feedback from people who've tried running nodes is that it's a very easy process for the familiar, and it's a doable process for the novice. The SPK airdrop is continuing for over a year because it's the answer to the SPK network's initial distribution problem, and obviously back to the network that is paying it via the DHF. We're just trying our best to execute a software rollout, glad you're a hodler..

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Very interesting. I have been thinking that I simply don't have the money to invest in the next Leo project whatever it is. I think I might have to skip the next one and then just buy in later when the price goes down like you mentioned here.

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This kind of relates with my latest askleo post. I am one of these who sold HIVE between $1.4 and $3, but I wish we had an instant power down option to profit of that even more. I do realize though that such an option would have probably made it impossible for HIVE to go that high.

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I did gather as much as Hive as I could for the Larynx airdrop snapshot, and I started selling immediately afterward. I was surprised to notice that the price wasn't collapsing. This suggests that few people did the same. Since the price is low, I expect to buy about 5 or 10 times as much as I'll receive over 12 months.

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This is also what I did.

Many others didn't because the price had just spiked to $3.40 and selling at $1.40 seemed like a bad idea. Clearly that was not the case.

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O yeah, I already forgot that. We've seen such spikes before, thanks to our Korean friends. That was obviously unsustainable.

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👍🏻 Anticyclical behavior in investing is always the way to do it. Be it crypto or stocks. Agreed.

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This is very true. Just like it's always been more profitable to buy bitcoin from a miner than to mine it yourself. SPK and Ragnarok may indeed be valuable in the future but you could have acquired much more selling hive at the top, buying hive now, and then buying all those "free" tokens from those with weak hands. The Airdrops still have their purposes for those that do them, but given a solution like wide distribution the best way to game it will come after the drop and not before.

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You have a great point but I can't help it, I just love airdrops :P

The illusion of getting free money is just too great

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In fact, a stable asset really only has to provide 50% APY to take over,

Stable Constant Growth, no fiat

Is that dilution? Are you selling bridges?

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Price of the underlying asset goes up right before the airdrop; that's when you sell. Buyback in weeks or months after the airdrop when the hype is gone. This is a winning bet like 80% of the time.

As for SPS, I forgive myself for I know next to nothing about staking. But for CUB, I think I failed to apply that proven strategy in stock trading. Hopefully, there will be next time to amend these mistakes.

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I disagree here... The Hive price was affected by global market and the airdrop had nothing to do with the price.
I doubted Larnyx in the begining because of poor UI, but I must admit the idea is powerful and this network could be big. As a chess player I wait for the Rangarok and didnt sell.

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By avoiding that airdrop entirely and rolling it all into buying the deflationary xpolycub asset up front anyone could have x10 their money within a matter of days

I see you used the word "anyone". BEcause if "everyone" would have used this strategy "no-one" would have gotten anything ;)

But yeah.. going against the herd is hard

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Two great lessons I picked up here:

  1. Airdrops are made to sound more lucrative than they are. So indeed, shouldn't have aped in on Hive to chase the airdrops.

  2. Time in the market is important. A little at a time stacked up over time.

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The exact thing happened to me with my Cosmos investment. Cosmos lost half of its value, and the airdrops I claimed are worth %1-2 of the investment. But I am insisting on my initial strategy. I will conclude after 1 year. (2 months already passed)

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Boss I believe you. We need to know when to put money in the market and when not to. Developing a nice strategy according to you will help.

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Whoever is directly controlling the V2K told me to kill myself.
They told me if I killed myself now it would save the lives of countless others.
Saying the longer I wait to kill myself the more people will suffer.


They are reckless and should have shown the proper media what they had before taking me hostage for 5 years. I know there are many in prison that dont deserve to be there because of this. Your stay in prison will not be fun @battleaxe and friends. People are going to want you dead when they find out what you did. I hope you die a slow painful death. You sick mother fuckers.

https://peakd.com/gangstalking/@acousticpulses/electronic-terrorism-and-gaslighting--if-you-downvote-this-post-you-are-part-of-the-problem

Its a terrorist act on American soil while some say its not real or Im a mental case. Many know its real. This is an ignored detrimental to humanity domestic and foreign threat. Ask informed soldiers in the American military what their oath is and tell them about the day you asked me why. Nobody has I guess. Maybe someone told ill informed soldiers they cant protect America from military leaders in control with ill intent. How do we protect locked up soldiers from telling the truth?
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Yeah, I'm wishing I had a bunch of my HIVE liquid back during that spike. It was an obvious moon event and we know how those end up. Now it is back to where it was pre-moon and I don't have much more to show for it. At this point I'm just hoping it doesn't take a crap back down to the 10 cent range.

As for airdrops, I'm for them but rarely hold them. Take the free money and run. Wish I had done that with DUNK when they airdropped me like $100 bucks worth. Now it is worth 0.01. Hahaha. !LOLZ

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Hard to believe and adhere to when everyone is turning right and you decide to turn left.
It has proved to great results but if you do not see far from our noise you will end up making the obvious choice putting you back on that circle.
Stop chasing or timing in crypto, just ride the wave and think long term.

!BEER

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There is a lot to be said for that strategy.
Pretty much every airdrop tanks in value at the start due to it being considered free money and most of them take a long time to gain use case and maybe even value.

Now is the time to stack CUB before the next airdrop while it sits at 9c. Sell the hype when they are about to launch ThorCub and buy it back in a few months time for pennies as well as all of your CUB back and probably a profit.

It's always good to bet against the markets when they are moving very far in a particular direction.

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Great points. Selling the hype is something that's taken me a few years to get better at. If it feels absolutely awful to sell, it's probably a good time. The rewards that get people excited are almost never worth it.

One thing I notice constantly is that whenever something is successful for one project, people demand it of every other project even though it makes no sense for that other project.

BAYC for example. Everything they've done has had a purpose that has served their project and that's why they've all been wildly successful. But as soon as they do anything 4000 other projects who it makes no sense for either rush to do it themselves and fail or are pushed by their community to do it and it ultimately fails.

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I am just really bad in timing my shit. I bookmarked this posts so I can read it every day. Maybe one day I will learn from my mistakes.

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Not completely analogous because they aren't "free", but IPO's in the stock market have a similar psychology. Very few surpass or even hold the initial price for many of the same reasons. Some do become huge successes as expected and hyped but almost never on the front-end short to medium term time frame.

You are correct though, it is hard to resist. I have lined myself up for almost every single airdrop in the HIVE community for the last year quite well. Don't have more worth to show for it yet :-)

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I think this post is directly speaking to me cause I love air drop and I've never seen one that is what my time and attention in conclusion most of them end up being not what you wanted them to be and as such waste of time energy and resources

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