Crypto speculators get a bad rap. Even the phrase itself makes any crypto-enthusiast cringe – like “This is a bubble!” and “Cryptocurrency needs regulation!”, it’s a phrase that incites a strong and negative reaction… but is this warranted? What are crypto speculators? What role do they play? What should we think of them?
(And for the record, I’ll try to present both sides of the discussion today.)
In any market, speculators are perceived as a necessary evil, a parasite looking to drain blood (well, mostly money) from the market.
For the purposes of this article, I’d like to define the term in the following way. We’ll call a speculator a cryptocurrency trader, whose sole goal in the market is to gain on future price movements. Crypto speculators have no interest in promoting the underlying technology, values and promises of the technology. They have no desire to facilitate mass adoption or deeper understanding of the technology and its applications from the general public. They care only about trades, charts and the profits to be made.
An important distinction must be made between speculators and manipulators. In this article we are looking at “honest” speculators, as market agents who use only publicly available information and their own judgement to bet on future price movements. We are not equating them to scammers who try to manipulate the market by employing various unethical trading tactics, or utilizing inside information to gain an unfair advantage on the rest of the market. The former are the focus of this article; the later belong in jail.
Why People Hate Crypto Speculators
“Why do you see the speck that is in your brother’s eye, but do not notice the log that is in your own eye?” – Matthew 7:3
Hypocrisy is a human default, thanks to our unique ability to deceive ourselves regarding our true motivations. Even though the majority of crypto investors’ (and most members of the community really…yes, even hodlers’) motivation is mostly to make money, they don’t perceive themselves as crypto speculators. If you press them hard, people will beat you to the ground with their moral reasons for investing in crypto and how deeply they are connected to the underlying values of the technology, while in reality they’re primarily in it for the money.
We are all too quick to judge others as terrible, dirty speculators who try to suck the blood out of the market and the profits from the hands of “real investors”, while in reality we are no different – but we fail to admit it.
Deep down people perceive speculation as something bad, and because we fail to accept and admit that this is actually a simple human motivation, that we are all inherently programmed to hunt or gather to the best of our ability, we criticize those who are motivated the same way.
Another reason for the hate is the crypto speculators’ perceived lack of morals or valuable contribution to the development of the community. As they don’t care about spreading the crypto-values, and they don’t contribute to the community, the technology or the general crypto environment, they are seen as draining money from the market without creating or adding any meaningful value.
Are Crypto Speculators Any Good At All?
If we leave our hypocrisy at the door and look closely at the mirror, we will realize in one way or another we are all speculators. Let’s face it, you are in crypto for “altruistic reasons” in much the same way that the current US president wants to “Make America Great Again”. Right.
So, given most of us are speculators, is that a good or bad thing? What’s the role all us crypto speculators play?
There are some classic benefits related to speculators such as adding liquidity and promoting efficient markets. While not many people would argue against such claims, for some the “harm” speculators do is much greater.
However, speculators are necessary for an efficient market to exist. If we look at the broader crypto picture, long-term success lies in the hands of the speculators. Even if they don’t contribute to the technical, ethical or other development of the community, they offer a much-needed function. They might be the biggest driving force behind mass adoption.
When speculators are successful they contribute to a healthy, bullish market. Their success (and the market uptrend) is a gateway to increased mainstream media attention, which is among the most effective ways to popularize the sector. The complex and esoteric characteristics of the blockchain technology would make mass adoption virtually impossible, if it depended on the understanding of the underlying technology. Most people would be immediately turned off and lost forever for the crypto world if it was left to attract their attention through technical explanation.
Hence, the invaluable role of crypto speculators. Through their financial success they “humanize” the technology and present to the mass public a part of it that is easily understandable – money. Through their miraculous financial success and the insane returns of the market, they present the unique, groundbreaking potential of the technology in an easily digestible form. People understand money and the media understands money. This is what will get everyone onboard.
Once everyone is hooked and is paying attention, it will THEN be through the successful application of the technology that mass adoption is achieved and secured.
The ability of the blockchain technology to generate vast amount of wealth for many people could be easily correlated in the eyes of the general public to its ability to generate vast amount of value in other aspects of our lives. History has shown that many of the earliest adopters of disruptive technologies are speculators – look at the dot com boom – but that regular people are the beneficiaries of those technologies once the speculation settles down.
Speculators and their success are what have made crypto part of the mainstream conversation (even bubble controversies would not exist without speculators).
There are not many things that the entire blockchain community truly wants. Mass adoption is one of them. But the truth is, if we want mass adoption, we need crypto speculators. We need many of them. We need them to be smart and successful. And we must love, thank and respect them.
Crypto is not just the technology, it’s not just the values. It’s a complex ecosystem and each living organism in it is a vital part of the integrity of the system. Developers, enthusiasts, dreamers, founders, investors, speculators (even scammers have brought untold publicity to the market). They are all part of what brought crypto to its current state.
We cannot remove any of these agents without drastically changing the complexion of the community. The system cannot survive, and certainly cannot grow and develop without speculators. They are the unsung heroes of our community, the dark knights that everyone hates.
But they don’t care, of course…after all, they are only in it for the money!
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