Who To Trust In Crypto

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Welcome to another issue of Passionate Income.

Today we’ll be discussing how information related to "hot picks" flows from the insiders to the general public.

In particular, we'll discuss who you should be paying attention to, who you should ignore, and how you can capitalize on the current crypto bull run.

Let’s dive in.

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Remember back in high school how the "cool kids" could start a rumor and totally ruin someone's reputation?

"So and so kissed ____, ewwww."

"So and so pooped their pants during PE."

While this behavior was childish and led many kids to experience unnecessary trauma, it's the perfect analogy for how information flows in the crypto industry.

Except in crypto, the cool kids aren't who you think they are.

See, it's easy to see influencers with tens of hundreds of thousands of followers and believe they're the cool kids.The puppet masters with all the inside information.

In reality, however, 99% of crypto influencers are at the bottom of the information totem pole. And because of that, investing based on their content and picks can get you rekt.

What you have to understand is that in crypto, it's easy to build up a lot of followers. Why?

Because it's an industry driven by fear and greed.

Meaning, if you can appeal to people's greed when the market is going up - and fear when it's going down - you'll get attention.

The only problem?

While the arguments they make to feed into these emotions are persuasive, they're almost never "correct" when it comes to booking wins.

See, the true insiders in crypto are a) Venture Capitalists, and b) veterans who've been in the game for years.

First, VCs have insider info because they're the ones that fund legitimate projects (versus meme coins, dog coins, etc.).

In fact, VCs are so prominent in crypto many investors actively avoid coins where venture capitalists are involved. Why?

Because the VCs couldn't care less about the project. Instead, they're there to earn huge profits (and cut their losses when something fails).

Meaning, if something works, the VCs will cash out - and send the price of the token crashing - as soon as humanly possible. Which, in many cases, can be 18-24+ months after a project goes live.

Second, veterans have inside information because they've been in the game for so long. Likely since the mid to late 2010s.

In many cases, they've already earned enough to retire multiple times over.

But because they love the industry and enjoy building, they stick around and work on new projects (most likely doing Dev or Marketing).

And because they've built a positive reputation for themselves over years and years, they have a huge network and get first dibs on information on projects that - based on historical trends - "should" perform well.

Unfortunately for us, most of these people are not active on social media.

And because of that, it's near impossible to figure out who they are let alone get in touch with them (unless you go to offline meetups/conferences).

From here, however, is where things get interesting.

Because if you think about it logically, the next best source of information after the VC and Veterans is their inner circle. Their homies.

In short, the people one degree of separation from the source.

The good news is that many of these people are accessible, including on social media. The bad news?

Because they're so close to the source, and because they know their value, they usually charge thousands of dollars to get access to them and their picks.

Branching out a layer, things start to get messy.

If you ever played Telephone in Kindergarten, you know how quickly a statement can morph into something totally different as it passes from one person to another.

Sadly, that's precisely what happens on social media.

First, most crypto influencers make more from paid shoutouts and referral links than they do from crypto investing. And because of that, they have zero incentive to do the hard work of figuring out what actually works in crypto.

Instead, they just shill random bullshit and get paid whether it goes up, goes down or crabs sideways.

On top of that, many influencers get paid in tokens before announcing a project. Then they promote it to their tens / hundreds of thousands of followers, watch the price skyrocket as their followers buy in, and immediately a sell.

A (highly unethical) process known as "dumping on your followers."

Last, you have the absolute bottom of the barrel: The random crypto bro who doesn't have a following, but shills his investments in the comments of various influencers' posts.

Hopefully I don't have to explain why these guys should be ignored at all costs.

In conclusion, the flow of information in crypto isn't that different from the cool kids spreading rumors in high school. Except unlike high school, in crypto the kids who "appear" the coolest are a bunch of posers.

💡 Takeaway: Insider information flows from VCs and veterans investors first and social media influencers last. Because of that, investing based on picks recommended on social is likely to result in you losing money.

🎁 Resources:

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