Why do people buy worthless tokens or NFTs without a usecase?

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Hype is all around us. Hype is a compelling phenomenon. It will make people go from a rational state of mind to the state I call the ‘ape brain.’ The ape brain will let you perform dumb and irrational decisions like buying the top of a useless project, and you end up with a huge loss. Or buy NFT’s just because they are ‘scarce.’ How to find the real gems and avoid scams? Let’s find out!

Only 16% of all traders achieve profits while the avarage loss of a trader is 49%

Hype coins

Most of these projects end up in a ‘rug pull.’ The developers and business partners who created the project will start dumping tokens when the liquidity is peaking. They will normally dump close to zero value and leave the project. Same for NFT projects. They can print as many NFT’s as necessary and dump them on the market.

Although the track record of these projects is bad, millions of people are investing in projects like these. Mostly younger people below 30, distrusting ‘the system’ invest in hype projects. Most hype coins do not have any real value or utility. The investors are

Anyone can start a crypto project and create tokens. Fully automated. For about $300. Pretty dangerous if you’d ask me.

Recognize useless projects

It’s not hard to avoid useless projects if you invest some of your time in doing research. Some of the signs are easy to recognize. Be honest and keep thinking straight. Let's sum up a few clear signs of projects you want to avoid:

  • Huge total supply with low-value tokens.
  • It’s a meme coin. 99% chance it will be useless or even a scam.
  • The project's only ‘use cases’ are based on token burns, token buybacks, and possibly a staking method. This is no real utility at all. It’s artificial value creation and will not end up well in most cases.
  • The project performs a token split (red flag)
  • NFT based projects with zero use cases for the NFT’s. These NFTs are just ‘extremely rare.’ This is extremely dangerous as it’s similar to a pyramid scheme most of the time.
  • The project is centralized.

Research

If you found a project without a clear scam or fishy features like I mentioned above? Let investigate this project a bit:

  • Conduct in-depth research. Monitor some social channels. Try to find out what kind of problem they want to solve. And decide if you agree with the goal of the project. The project needs to prove it’s aiming to become relevant.
  • Read the whitepaper. This sounds boring. And most of the time, it is actually pretty boring. But it is important. If you are serious about your hard-earned money, do this.
  • Join the social channels and follow some discussions. Avoid moontalk. Decide if you like the project based on the input from community members.

True value

Projects worth investing in do exist. Some are pretty strong and do solve real-life problems. But how to recognize these projects? Personally, I always look for certain signals like:

  • Can you approach and talk to the team members?
  • How does the community talk about the project? If the community is like 25%+ moon talk and hype, I quit.
  • Does the project have a solid whitepaper? Solid tokenomics?
  • Do you like the idea? Or the problems the team wants to fix?
  • Did the project release any products or prototypes yet?
  • Does the team have a support desk? Or support channel with solid support?
  • The team members are real persons? You can contact them? Avoid fake profiles. Do they have a good track record? Maybe they were involved in scams in the past?
  • Is the token useful? Or do the NFTs have a real purpose?

Most important rule. Do some research! I know it’s hard. You want to ape indirectly and be a millionaire tomorrow. Well. That’s NOT GOING TO HAPPEN.

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