Rat Poison

in #hive-16792228 days ago

Warren Buffet called Bitcoin "rat poison squared" at the Berkshire Hathaway's annual shareholder's meeting in 2018.

Let's note that it was a good time to lash onto Bitcoin since it was the start of the bear market, and people may have been more receptive to such characterization. In the meantime, Buffet became more open to the blockchain technology, but not to bitcoin as an investment, although his hedge fund invested in a Brazilian bank that offers bitcoin investments as one of the products.

But I don't want to talk about Warren Buffet or bitcoin here. His stance on bitcoin is his business.

I just wanted to borrow his expression in the title, and made a short introduction about it, for anyone who didn't know it.

I want to talk about the regular people in crypto and what may be rat poison for them. Bitcoin is not rat poison, although I doubt enough of us would have enough bitcoin to make a difference, so maybe something else would.

But... what would? Choices matter! I mean I came across two pieces of information, which, put together paint a pretty grim situation for the regular crypto investor who might be... tempted by so many choices.

This is one of them, from Coingecko, although there was a better chart elsewhere but I don't seem to find it again:

In the first part of the bull market the trend of newly created tokens was up, obviously. It always is in a bull market. But almost 200 thousand new tokens created in March? Common! It's obvious nobody writes or reads the whitepapers (or any kind of information) for many of those tokens.

And here's the second one:

You can read the conclusions in the image above, but I'll list them in bullet point form too:

  • 97% of memecoins have died since 2024 (note: we are in 2024, so less than 3% lasted more than a few months)
  • 6 out 10 new investors view memecoins as a must-have in their portfolios
  • on average 2020 memecoin projects die each month
  • over half of memecoins (55.24%) are malicious
  • the average lifespan of a memecoin is 1 year, which is 1/3 the lifespan of the average crypto project
  • nearly one-third investors have experience losses from scam memecoins

These stats are pretty worrying, aren't they? Particularly that newcomers want to have them in their portfolio despite the risks. That's because memecoins are generally nothing but marketing/advertising when they pump, and they attract people.

These two pieces of info are what I would call rat poison for the masses, because most of them are meant to separate the investor/gambler from their funds, may that be fiat or a much better coin from the crypto space.

Can money be made with memecoins? Sure! Evidence shows exorbitant profits can be made with them. But the vast majority either loses or won't make life-changing money, and they expose themselves to extreme risks.

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Hmm even though the failure rate of memecoins is almost 100%, there are still a few of them that has actually outperformed coins with legitimate utility. PEPE on a YTD basis is still at 500%, despite being down massively from its peak earlier this year.

Well, BTC is still at 3.5x this bull market. Didn't do 5x this year, but it also doesn't have the risks of PEPE. And PEPE seems to be one of the resilient memecoins, unlike the other 97% this year. I'm still waiting for the other non-meme altcoins to do their thing. Personally, I won't buy meme coins. I could hold them if I earn them hoping they pump, but not buy them.

The likes of Buffet are those who will have millions of BTCs in their accounts but come outside to sabotage it
I’m sure he has a cryptocurrency in his wallet

Luckily, there will be only 21m BTC at max. Having a few million BTC would be very difficult for anyone.

Never understood that saying... If BTC is rat poison, who are the rats? Ordinary people like you and me? Or good ol' bankers? 😃

As I can see, Bitcoin is killing them...

In my opinion, Buffet understood what bitcoin (and blockchain) was and got afraid about what that meant for the financial sector. He tried to use his influence as an investment "guru" to scare people (and Wall Street) away from Bitcoin. It didn't work.

One can think of rats as the ones saving themselves from a sinking ship before the inevitable...

Problem is that the liquidity is spread between all of these thousands of new tokens and very few will attract higher amounts and outperform. Many die as you said.

Yep. Competition is harsh in the memecoins land, and with nothing standing behind the project except hype, they quickly die if they aren't lucky to build a community around their project.

💯

Are you saying we should be Bitcoin only? 😉

although I doubt enough of us would have enough bitcoin to make a difference

if people focused on stacking it, then at somepoint it would make a difference.

Are you saying we should be Bitcoin only?

No, I haven't turned into a Bitcoin maxi recently. 😀

But I don't think memecoins are a solution either, for the most part. Other altcoins, sure, but looks like we have to suffer on them for long periods of time too. Maybe even memecoins if you know they are extremely risky and you can lose everything you have on them.

if people focused on stacking it, then at somepoint it would make a difference.

They are only 21m. If people would focus on stacking, there would be less for everyone. Sure, could be worth more in dollar terms.

Sure, could be worth more in dollar terms.

Isn't that the point?

It... depends. On how high are the fees at L1, how centralized or how big are Lightning solutions at L2, on whether the medium-long term goal is commerce in bitcoin (or crypto, in general) or in dollars.

as a store of value that doesnt matter, also whether people want to be paid in fiat, btc is just another currency and can be converted. if it holds and grows in value is the key imo. Look at Splinterlands, SPS pumps and the community gets excited. It is a shame they didnt figure this out on Hive instead of making a fiat backed dollar.

Splinterlands has DEC too. In a way, they drew inspiration from Hive with its dual-token system, with their own twist.

HBD has its role and will have for a long time, no matter if people only want to see HIVE thrive. The success of HIVE (on a certain timeframe) may come from HBD thriving. But when HBD's main role was for a while to be sold for HIVE and then from HIVE to BTC and then to fiat to cover expenses, that's not good for HBD or HIVE. That's why I believe VSC is doing a great thing integrating it into their platform.

Good point. That could be true.

The stats are worrying. I think it's more about people wanting to make money. The huge gains that people can get tends to be found in meme coins as they can pump quite a bit. However, it's risky and most of those projects are nothing more than words.

The huge gains that people can get tends to be found in meme coins

That's the main problem in my opinion. Instead of the gains to be in the wallets of people as top coins and in serious projects, they are in meme coins, always other meme coins. So, except with a few lucky or smart ones, most people only have the illusion of getting wealthier.

Having over 200k new tokens created in March alone is crazy. Everyone wants to have a token, lol

It is kind of crazy, that's true. Although, it depends on what are those tokens used. If tokenization of everything would really happen, 200k in a month would be nothing. Unfortunately, I suspect many of those tokens are void of substance and only gambling tokens.

BTC is never a rat poison
Rat poison kills but BTC changes lives

Yep, I'm sure that's what Buffet wanted to say too, but it didn't work out for him convincing the world about the merits of that message.

🎯

Newcomers could also have a steeper learning curve if they want to stick around for the long haul with all these choices welcoming them at the door. I think to a certain degree cultivating discernment, especially with regards to investing fundamentals can help but who has time for that when projects are promising quick riches?

In my opinion, many of the newcomers are drawn in by influencers or investment groups who only give them a "tip" on investment, without any training. That's the worse one can enter a market. Buy a product and not know why, except hoping it would generate profits on the short term.

The expectations can be pretty high in such situations, which also means the fall from expectation to reality can be depressing to say the least.