TL;DR

The ‘five stages of grief’ meme applied to crypto perfectly captures the emotional manipulation and predictable trajectory of market bubbles fueled by hype and lack of regulation. History repeats itself, leaving naive investors holding the bag.

Story

The five stages of grief, humorously adapted to the crypto market, mirror the emotional rollercoaster of financial scams throughout history. From the denial of a crashing market (‘It’ll bounce back!’) to the desperate bargaining (‘Just let me break even…’), these emotions cloud judgment. Like the Dutch Tulip Mania or the dot-com bubble, hype overrides logic, creating a fragile system primed for collapse.

How it happens: ‣ FOMO (Fear of Missing Out): The contagious excitement pushes people to invest without due diligence – like gamblers chasing losses. This fuels the bubble. ‣ Speculation vs. Value: Crypto, lacking intrinsic value like a company’s earnings, becomes a game of musical chairs. When the music stops (demand dries up), the crash is inevitable. ‣ Lack of Regulation: The Wild West nature of crypto allows scams to flourish, mimicking the unchecked greed of the pre-2008 mortgage crisis.

Impact: John, blinded by promises of ‘guaranteed returns,’ lost his life savings in a rug pull.* His story echoes countless victims of pyramid schemes and pump-and-dump scams, highlighting the devastating human cost of financial fraud. *‣ Rug Pull: A scam where developers abandon a project and steal investors’ funds.

Lessons:

• If it sounds too good to be true, it is. ‘Guaranteed returns’ are a flashing red flag. Remember Bernie Madoff?
• Understand what you’re investing in. Don’t buy into hype—research the underlying value.
• Diversify. Don’t put all your eggs in one basket, especially a volatile one like crypto.

Advice

Treat ‘guaranteed returns’ like a plague-ridden rat. Run. Do your research, diversify, and remember: If it smells like a scam, it probably is.

Source

https://www.reddit.com/r/wallstreetbets/comments/1jadc4s/5_stages_of_grief/