I won’t go so far as to say every person who writes an article telling you to buy a particular cryptocurrency is out to screw you over. However, people are using publications and social media to truly shill their preferred coins because they are running a scheme involving screwing over investors. Below are three tips on how to filter out the bad advice.
Overly Pessimistic or Optimistic Outlooks
There are many ways to get people to buy something, whether it be cryptocurrency or anything else, and one of the most effective ways of doing so is by warning of the negative consequences of not buying it. An example of this is publications warning of imminent stock market crashes and hyperinflation and telling you to buy Bitcoin to protect your savings.
Even better are the articles predicting society’s collapse and saying you need Bitcoin to make it through. That is the stupidest advice I’ve ever heard. If society collapses, your Bitcoin will be worthless without electricity or the internet.
On the other hand, there are people who are always overly bullish, and they publish articles that make unrealistic predictions. I won’t mention names or publications, but there was a much-talked-about article predicting that Bitcoin would go up to $100,000 by the end of 2021. It’s December 3rd, and Bitcoin is nowhere near being valued that high.
These overly pessimistic or optimistic articles are likely written by “expert analysts” who are being paid by someone who wants the value of his investment to go up; or the analyst is invested in the coin himself, has a large following, and wants to use his influence to drive up the value.
These people are not shills, but they have their favorite coins and want them to do well. I’m partially guilty of doing this with privacy coins because I think my financial transactions are my business and no one else’s. However, I’m giving practical advice, not investment advice. These people root for their favorite coins for whatever reason and think you should too. Analysts and investors, and especially analysts, should never have an emotional attachment to any investment, cryptocurrency or otherwise. Your favorite coin is not the New York Rangers. If the Rangers finish last place in the standings, you won’t go bankrupt.
Taking investment advice from someone who has an emotional attachment to a coin is just as bad as taking advice from someone shilling for a coin. They are thinking emotionally and can lead you into trouble.
How to Filter the Good Advice from the Bad
The best way to know the difference between good and bad advice is to learn as much about investing as you can. In other words, be your own expert. You should also read up on history and economics as it relates to investing. Doing so will give you the foundational knowledge to discern between analysts giving good advice and analysts shilling for themselves or their clients.
Another good thing to do is read up about fraud and past examples of it. Among the main elements of fraud is someone raising your hopes to unrealistic levels or promising doom if you do not take his advice.
As for advice about investing, the two best things you can do are diversify your investments and keep track of current events related to your assets.