Dark Confessions of a Crypto Researcher & "Alpha Hunter"
Like a Wolf Shepherding the Sheep to Slaughter
Theo Delarosa
March 05, 2023
Being involved in researching crypto feels like being a wolf whose job it is to shepherd the sheep for slaughter.
The most honest description of what a researcher does is to try and find opportunities with outsized opportunities for financial reward in their favor. The goal is to find the most opportunities to extract value from the market.
This involves identifying what has the most potential and then doing your best to make sure other people know about it - so they can buy after you.
Feels like working for the nicotine industry and being tasked with marketing smoking as cool to young children to get them hooked early as future customers.
The inherent basic idea behind researching and then presenting that information to an audience is “hey I found (and bought) this project and I think it can go up in price and now I’m telling you so that you can buy and help make sure the price goes up”.
Crypto tweeter is full of “gem” guides, threads and theses on the next 100x. Keep that in mind the next time you see someone shilling their bags.
The Bigger Picture
You must understand there is an entire class of people who’s professional business is to make money in crypto. At the expense of you.
It’s disheartening to see so much of this content go viral. Personalities are lauded and build up massive audiences.
Truth is, none of that content, research or thought leadership is actually “good” in the sense that it probably won’t give you the edge you're looking for.
It doesn’t mean the people are unintelligent, just that following what others say simply gives you the “illusion of alpha”.
Those people and accounts are here to build their brand as knowledgeable, intelligent, influential and basically that they have alpha so that they can make a living off the audience they groom.
Nobody can tell the future. Whenever somebody shares their ideas on why something will perform well in these thought leadership styles, it’s not because they really know - simply that they have financial interest in pushing that idea.
It’s like watching sheep be directed right towards the slaughterhouse. “Follow me everyone, I won’t lead you astray….” Then right into the meat grinder the exit liquidity goes.
Psychology of the Average Person
Why must so many people be like this? Eager to look up to others and value their opinion?
That’s the crux of the issue. People are inherently eager to find people to look up to. That key opinion leader or influencer doesn’t even have to be a bad person.
They may think in their head they’re one of the good guys. Just sharing research, alpha and good vibes…. right?
You can’t escape the truth, though. Everyone is here to get rich. Even if they say they aren’t.
Oh, just a builder? Here for the tech? Are you not trying to build something successful that lots of people will eventually use and make lots of money from it?
Unfortunately, knowingly or not, our role in the hierarchy as researchers, analysts, educators, thought leaders and so on is to spread information and make people aware of what we’ve pre-identified as being a good opportunity for ourselves.
To shepherd them, provide them with all the marketing shills, data, analytics, and resources that they may need to think they’re making intelligent investing decisions.
In reality, you're probably just being funneled as exit liquidity.
The Role That Bagholders and Community Members Play
Crypto in its current form is about speculation.
The core ideas that first inspired the creation of crypto and blockchain such as decentralization, self custody and trustlessness were honorable and respectable, but with the thousands upon thousands of projects out there nowadays, we’re just speedrunning financial games and speculative bubbles that have previously played out over hundreds of years.
Then there’s a soft pity for the true believers, bagholders and tech enthusiasts. True believers are some of the best suckers out there.
There’s nothing easier than exit liquidity which is eager to be exit liquidity.
Faith and trust are unbelievably easy to corrupt. And that’s what everyone is trying to do. From big accounts to small accounts.
Everyone is trying to cash in and carve their piece of the pie out.
But hey, don’t feel too bad for them - lot’s of them may make good money just by being around for the long term because over the long term, crypto does go up.
Early adopters were historically rewarded lucratively for being early.
At this stage though with thousands upon thousands of projects in a saturated market? The game has changed.
Be wary of everyone. There is no “good” research, alpha hunters or any of it. Just narratives and ideas that gain traction.
We’re all just combatants in the greatest wealth transfer opportunity of our lifetimes. A zero sum game.
We all put money into the pot and hunger games ourselves to cash out the most possible before others do.
Best you can hope for from the accounts you follow is that they don’t bullshit you and will have the balls to tell it to you how it is.
The truth leaves a bad taste in your mouth but you need to hear it.
Hope on the Horizon
On a closing note - don’t be discouraged about the reality of the space you’re inhabiting.
There is tons of opportunity out there and there most likely will be much more over the next several years.
Just keep a calm head and don’t drink the kool-aid when it comes to believing in the long term potential of some of these projects.
Most will go to zero. Just take a look at some of the hot projects from the 2018 era and how many of them have faded into obscurity.
Learn to play the game and stay safe.
