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20 Nov 2021

How to Prevent Hype from Influencing your Crypto Investment Decisions?

Upon starting crypto investment, a good platform to obtain some understanding and insights regarding the crypto world would be the online crypto communities, such as those present on Reddit. Such communities offer you the chance to learn about the coins that are not doing well, as well as how other investors perceive certain coins. However, at the same time, such platforms are also quite unsafe for investors to visit since they cause you to believe in the hype created by a tiny crypto investing subsection.

Ignoring such hype does not mean that you need to hide from such communities. Rather, it is about ensuring that the information that you obtain is only being used as guideposts to formulate your strategy.

Although it is vital to learn about the potential downsides of certain coins from the points-of-view of other investors, it is equally vital to be clear about your own reason behind the belief or disbelief in a certain currency. Hence, the information taken from such communities should be used as a tool for assessing and evaluating the technology and currency.

The mistake that investors make is that they visit these communities, focus on the opinions of armchair crypto-analysts, and then react to each changing opinion. The end result is that these investors keep chasing different coins, without much success.

Read Technology Whitepapers

To avoid being influenced by the hype, it is important to understand the founders’ perspective regarding the purpose of their blockchain. This way, you will be able to effectively research the market and determine:

         - The growth potential

         - The blockchain disruption potential

         - If the particular company can create that positive disruption

The company’s whitepaper is an excellent resource for obtaining the above information. Pretty much every trustworthy blockchain started off with the creation of a whitepaper that outlines the plans of the blockchain, the reasons that make the blockchain unique, the problem that the blockchain can solve, and how the crypto space can benefit from the blockchain.

The company uses these concepts to create the cryptocurrency, which means that they can offer crucial insights regarding the thought process of the company, and its perspective regarding the technology and potential. Therefore, whitepapers allow you to learn precisely what the blockchain is supposed to do.

Any investor who makes investment decisions without referring to these whitepapers is relying on hype. Someone said that dogecoin has potential, so they make investments in dogecoin. They have heard that Cardano is unique, so they make investments in Cardano. By believing in hype such investors endanger their investments – especially since they will be looking to get out at the first indication of retrenchment.

Use Trusted Resources

Correct consumption of information is a crucial skill – it is not just about the outlets you use, but also about the stories you decide to read.

This is particularly vital in the crypto world. Since some crypto-specific media platforms are operating with the inherent goal to promote certain coins (and attract eyeballs towards their content), you need to be wary of excessive enthusiasm from the crypto space.

Having said that, you also need to watch out while using mainstream outlets and sources since many do not yet accept or understand the ideals that have led to cryptos becoming legitimate investment tools and options. Hence, you must read every article with a pinch of salt and effectively distinguish fact from conjecture. For instance, if you read a report that says that someone hacked an exchange and took out $400 million NEM, that is a fact, and you can use it in your analysis. However, if you read that the Cardano founder feels that the coin can reach a value of $12, it is just his opinion and, therefore, not useful to your thesis.

Final Word

To sum up, it is important to make informed crypto trading decisions and platforms like can prove immensely helpful in that regard, which is why we strongly urge you to check the platform out.


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