The worst aspect of crypto is a vertical green line. The chart usually resembles a rocket ship when a new token, such as Falcon Finance ($FF) reaches a big exchange. Your heart beats faster. You look at the percentage gain, +40, +60, +100, and one thought, which causes panic, comes to mind: I am missing out.
It is the Listing Hype, and that is where the majority of the retail traders lose their capital.
I have been making deals on these markets over time and I have understood that your brain is designed to put you down in such situations. Our biological systems have been programmed to pursue resources which are on the run. In finance, however, to buy green candles often implies that you are the so-called exit liquidity of someone who previously bought long ago. The solution to the hype is to put cold hard facts behind your feelings, so that you can survive.
The first fact is between the market cap and FDV.
When you notice that the price of FF is bursting through the roof, do not look at the price tag anymore. Have a glance at the Fully Diluted Valuation (FDV). The total supply of the Falcon Finance is 10 billion tokens with only approximately 23 percent circulating. When you purchase the spike of the hype depending on the market cap that exists today, you are disregarding the 76% of tokens that remain locked. Astute investors will look at the schedule of vesting. They are aware that there is a lock-up or a 1-year cliff of early investors. This is a good news in the sense that big dumps are not occurring as such but also it denotes that the long-term value will rely on the actual growth of the protocol rather than excited by the on-day excitement.
The Second Fact:Utility Over Specification.
Ask yourself: Is it to sell to a bigger fool in ten minutes that I am purchasing this token, or is it to do something that this token does? Price is all that FOMO buyers are concerned with. Smart money is concerned with the product. The token in the case of Falcon is not merely a meme ticker but the key to increasing their yields on their synthetic dollar, sUSDf. Unless you have intentions of utilizing the platform to generate yield or vote on governance, then you are gambling and not investing.
How to Stay Calm
When the next listing comes, and the chart is parabolic, put your hands under your thighs. Literally. Sit on your hands and watch. Allow the first price discovery to take place. It is common that within the first 48 hours of the chaos, the price stabilizes, the hype tourists have been sent away, and the true trend starts.
The true riches do not consist in being caught at the pump in 15 minutes. It is prepared by knowing what you have and purchasing when everybody is bored and not at the time when they are euphoric. Calm down, verify the information and allow the market to approach you.
