The Wolves of the Blockchain Industry

Sell me this pen.

Not too long ago, we were all watching “The Wolf of Wall Street”. Learning who the hell Jordon Belfort was & understanding all a little better how Wall Street managed to achieve it’s fucked up reputation we hear so much about.

Fast-forward past the actual events, and here we are in Blockchain/Crypto Mania. In a time where Bitcoin was the ultimate fuck-you & the ultimate I-told-you-so story. Why or how did it all happen in such a small amount of time? Well.

In my opinion, the Blockchain/Crypto industry made the same mistakes as greedy stockbrokers back in the day. They hired a couple of incredible salesmen that didn’t give a flying crap about anyone or anything but themselves. That led to the birth of numerous methods of hustling to boost a coin’s value.

“It’s a fraud. If a JPMorgan trader began trading in bitcoin, I’d fire them in a second. For two reasons: It’s against our rules and they’re stupid. And both are dangerous.” — Jamie Dimon

Ever wondered why bankers and stockbrokers tend to attack the Crypto market’s prices so harshly? Not because they are haters. Mainly because they did it before. They did the exact same things before and they just know how it was going to end.

They smell the greed laid out by these high level salesmen. Reminds them of themselves back in the day, before they all got thrown in jail and all that stuff.

“In terms of cryptocurrencies generally I can say almost with certainty that they will come to a bad ending. Now when it happens or how or anything else I don’t know.” — Warren Buffet

So much truth towards all the negativity out there. It’s all warranted. It’s all from experienced professionals who got hit, took the hit or were part of the hit back in the day. I don’t blame them. I look to really find out why they said these things. I have no doubt in my mind that they have a small portfolio somewhere that invests in some sort of Crypto & Blockchain tech, but they’re probably doing it smart. Not jumping on hype trains in fear of FOMO nonsense.

“There is a real and heightened risk of investment bubble of the type seen in Ponzi schemes which can result in sudden and prolonged crash exposing investors, especially retail consumers losing their hard-earned money. Consumers need to be alert and extremely cautious as to avoid getting trapped in such Ponzi schemes.”- Ministry of Finance (Govt of India)

There is a very real problem out there when it comes to shitcoins. It will hinder the progress and everyone should do their part in eliminating these opportunists for the overall industry to properly move forward.

Pump & Dump

“Belfort’s Stratton Oakmont brokerage firm ran a classic “pump and dump” operation. Belfort and several of his executives would buy up a particular company’s stock and then have an army of brokers (following a script he had prepared) sell it to unsuspecting investors. This would cause the stock to rise, pretty much guaranteeing Belfort and his associates a substantial profit. Soon, the stock would fall back to reality, with the investors bearing a significant loss. -NYTimes.com “

Sound familiar? The Pump and Dump strategy might be one of the oldest tricks in the book. During the height of Bitcoin end 2017 was probably also the peak of the shitcoin industry. It was crazy times in Blockchain & Crypto as people were doing whatever they could to jump into the industry.

Startups raised $5.6B through ICOs in 2017. Although less than 50% were considered successful, they STILL managed to raise such a large sum of money. Majority who ICOs who might have managed to return any money to their initial investors, were ones who were issued Q1 2017 before the 2017 spike in the market.

More and more research getting posted in recent months, have raised many allegations that a lot of the pump & dump boom of Crypto in 2017 was due to market manipulation. We’re all well and aware of JP Morgan’s CEO criticizing of Bitcoin and then having articles leaked of JP Morgan’s investments in Crypto. Fake news? Honestly who knows. But we know full well that manipulation is there, and its obvious.

Looking at the number of ICOs in 2017 compared to 2018, there is a significant drop. Highly attributed in my opinion, to more serious people and experts entering the industry and keeping things more regulated and open. Although there was a drop in the number of ICOs, there is a growth in terms of money thrown in compared to 2017. This says a lot about what has been going on in 2018 compared to 2017.

I personally think that the Wolves of the Blockchain industry are slowly being pushed out. However, with this fact, a new breed of scammers are entering the industry to hit the market with hit & run scams. In Singapore, 78k was lost in bitcoin investment scams the last 3 months. Does this say a lot? Absolutely. The way I see it, people especially in South East Asia or 3rd world countries where Crypto is actually needed, the opportunity to scam people is very real and incredibly threatening to the industry. There are many areas where education is severely lacking & Facebook or Online/News manipulation is just a cruel way to control these people who don’t have access to the right information.

Myanmar is the perfect country to describe this problem. Where Facebook is pretty much the only source of information for majority of the population, there is a lot of manipulation being used to control their markets through Facebook. Companies and scammers all understand this & takes advantage of these loopholes.

If a country like Singapore still can get hit by these scammers, even with a education system rated at the top of the world, imagine what is being done in other parts of South East Asia?

Vietnam. Thailand. Myanmar. South Africa.

Overall, we’re never going to eliminate scams. I still get those Nigerian Prince emails every once in awhile. But we can all educate ourselves with the right information because if you’re still getting scammed in today’s day and age, with numerous websites exposing these crooks online, you deserve it. Regardless of what it is you’re putting your money into, you should always educate yourself first. It doesn’t matter if your father was the one that told you he put 100k into this new investment. You don’t throw your money away based on blind faith.

Would you spend 100k sending your children to a shitty school or NUS/Harvard? Do your homework before throwing your life savings away. People need to stop blaming the industry for their losses when 99% of people who went into Blockchain/Crypto went in without knowing anything other than the price valuation at the point of entry & the potential point of sale. Majority still don’t know what is Bitcoin/Blockchain/Crypto and therefore continues to label it as a scam instead of blaming their own ignorance.

Educate. Stay Safe. Stay Smart.

HODL onto the right thinking & drive forward without fear.

Don’t let the Wolves get you. Be smarter than and stay ahead of the Wolves in every way.