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How Crypto Has Turned Everybody Into Degenerate Gamblers and Chance Kings
This has been one of the most crushing weeks I’ve dealt with in a while - hence why I wrote nothing yesterday and have really struggled writing something today. I didn’t want to write about crypto, mostly because my experience with crypto right now is very negative - not because I didn’t gamble, and I didn’t succeed, but because I got out of things when I had to, and of course everything popped the moment I got out of it. The amount of money I lost out on is enough to make me want to (but not actually) put holes in the wall, and naturally I return to my previous statement of “I am mad at myself for not seeing the future,” which is a continual problem that I am annoyed that I have.
Right now, there is a huge surge of people talking about dogecoin, which is now at 35 cents (after being basically nothing a few months ago, and about 5 cents last week) which has probably made somebody who bought it as a joke quite rich. I, of course, had dogecoin, and I, of course, sold it because I put it in something else that didn’t go anywhere, or took it to pay bills, or other relatively sane things that you do rather than hold anything in a cryptocurrency based on a meme that was overdone years ago.
I now see people who have never so much as mentioned crypto talking about Doge, and how Doge is going up, and I am annoyed, because why didn’t I put money in the totally useless thing with no inherent value? I imagine this very same conversation has happened in millions of people’s heads, which has led to the coin going even higher - along with the rest of the crypto market, with the exception of what little I have left in it. I am very bitter about it, if only because I have the extremely childish view of “deserving” the “right price,” which is not how things work. I hate writing this, because I’m embarrassed that I missed out on a lot of money, but I think that people read this newsletter because I’m honest. I have a great life! I shouldn’t complain! I should feel good about my life! But because I missed out on something, I hate myself for it.
I feel as if this is going to be a similar phenomena to the Gamestop-Robinhood situation that took place either a few months or 10 years ago, depending on how time feels to you, but with a more aggressive difficulty and reward curve. People were constantly seeing random people talking about $GME and saying that it was, in fact, only ever going to go up, and that now was the time to jump on the hype train, and that this number would only ever increase - until it didn’t.
And most of me is saying this is the same thing with crypto - except I said it at $10,000, and $50,000, and so on and so forth. The small part of me is saying that there’s no way it goes any higher than this, and I’m a smart person to not pour capital into it…except what if it goes higher? Why haven’t I put more money into it? Am I going to miss out?
This is the ultra-risky version of basically all societal pressure. Lots of people talk about something, they say it’s great, they say it’s the future, and with enough repetition and proof that it’s made them something, we too may become a true believer. I would argue that a large amount of people are now invested in Bitcoin that either thought or still think that it’s absolutely stupid, but see that the number keeps going up and want to get on the train. Instead of people wanting to wear the same clothes as each other or watch the same movies as each other, they now want to all invest in something for fear that they will miss another chance to become filthy rich.
And like all things that can or have make somebody rich, the smart money has already moved by the time that normal people have a chance to make money, and all that normal people can do is buy in and hope that the next move that the smart money makes is one that helps them. When the numbers go down in crypto it’s very difficult to actually say why - almost as difficult as saying why the number went up, and I feel like the vast momentum that the cryptocurrency markets have is fueled by this fear that people have that yet again they’ll be left behind.
The problem isn’t so much that it’s too accessible (this is a problem unto itself, in particular the easy access with a VPN to margin levels that should make anyone scream), but that the forces behind it are somehow even more confusing and capricious than the stock market. The forces that actually lift a cryptocurrency’s price are beyond ambiguous, with few real explanations for anything that has happened in the last year, or even ten years beyond “more people are interested.”
I was going to write “what’s going to happen” here, but I really don’t know. What I fear is going to happen is that some people who enter into this are going to find themselves screwed when the inevitable movement by those with the real money decides that number should go down, and keep going down. While there have been ebbs and flows where the smart money has decided to accumulate more money and then push the price up to make even more money, there is inevitable a time (like back in 2018) where they just went “ah, we’re done” and everything went into the toilet. Some true believers say this’ll happen again, and some say that it will never happen again, and neither side seems to have a cogent argument.
The Chance King’s Wrath
A few weeks ago, I saw need to create a fake casino brand for a fold up craps table I bought - yet another normal thing you’re just going to have to read me write and nod at. I thought of the most garish, stupid idea for a logo - a skeleton with a crown with flaming dice eyes - and had a professional artist (my good friend Jen) design it. The name of the skeleton is “The Chance King” and the fake casino is “The Chance King’s Grotto.”
It feels the right time to mention this, because I believe that crypto is making chance kings of us all - all of the things that I’ve written above make a lot more sense emotionally and mentally if you’ve spent a significant amount of time around a casino, or had anyone you know have a serious gambling addiction. It’s not really like the stock market, because the stock market has some sort of underlying structure or rules that make some sense, though not much.
The rapid-fire generation of neuroses that crypto is causing reflect the exact feeling that someone gets in the casino - the overwhelming sense that you are missing out every time you haven’t put a dollar on the table, and the crushing feeling that you were stupid for not picking the right number at the right time, despite having no real way of knowing. People who are suddenly saying that they were smart for buying into doge are about as logical as the people that claim that they “knew 11 was about to roll,” and those who feel sick to their stomach (myself included) that they missed out on a “big win” because they decided to do the logical thing are rubes of the same shape and size.
While there are some underlying technologies within the sphere of crypto, the actual value of a cryptocurrency or token or whatever wrapping they put on it seem utterly divorced from any actual actions taken with them. When a new project releases a promising new feature it’s more than likely to do absolutely nothing for the price, but it might also send the price skyrocketing…and it might also send it into the toilet. Why? Who knows. It’s somehow worse than a craps table, in that sometimes you can roll snake eyes, but then more eyes open and in fact you rolled a ten, or sometimes you can roll a six, but then another dot appears and it’s a seven.
And those who are suddenly getting into crypto are doing so based on the same gambler’s philosophy - that they are destined to win, and the market that’s rolling has a hot hand, and they’re about to be rich. Or they’re “going to put a little money into it” because it’s “fun.”
Then again, the same can be said of the stock market - but the ease of access and bizarre volatility exist to wipe you out as quickly as you put the money on the table, just like gambling. The emotional swings and wins and losses have the same thrill and pain as a craps table, with the same brotherhood of winners when things are going well and the same coterie of losers mumbling to themselves when they’re not.
I also think that the volatility and sense of danger is what attracts some people to crypto. You could lose it all - or win big - just roll the dice and get on the table. You could hold this weird coin that has no inherent value beyond what those who buy and sell it give it, and you can feel as if you have some control by “choosing” which currency, despite the fact that you have even less control than you would investing in a company stock. But people love the idea - just like in a casino - that their theoretically small amount of money could be so much more based on their willingness to risk it.
I should be clear, I have no greater conclusion of this piece. I don’t know how much I’ll dick around with cryptocurrency going forward, but I know I’ll feel bad when I see something I had that could have been worth more. It doesn’t make any sense and on some level drives me completely insane, but it’ll always be there, nagging me until I decide to get on the board again.