The Pipe Dream Fallacy

I am compelled to write this article as a RED LIGHT WARNING to real estate investors dabbling in crypto – if it sounds too good to be true, it is. And it’s most likely a scam.

Recently, a couple of people in my inner circle were victims of crypto investment scams: local and offshore. The advent of AI-assisted investing makes it seem even more legitimate by promoting cutting edge technology. The key element is that these investors are novices with no real working knowledge of the cryptocurrency industry. These scammers rely on ignorance to operate with impunity especially when there is no ability to conduct proper due diligence. But the enticement of huge returns – double, triple, quadruple, even quintuple digit returns – is a compelling hook.

Listen to this interview with Michael Saylor, founder of MicroStrategy, expert in all things cryptocurrency. https://youtu.be/dsPNjskCHr8

Most notably, he warns of unregulated offshore exchanges creating their own tokens, pumping and dumping known as rug pulls. This is the reality – the vast majority (99.99%) of crypto tokens are unregistered securities.

Why do people want to believe in unrealistic investments? There are various psychological behaviors that lead to poor decision-making such as:

• Sunk Cost Fallacy
• Fear Of Missing Out
• Social Proof
• Cognitive Dissonance

https://futuramo.com/blog/the-psychology-of-dodgy-investments-why-people-stay-and-how-to-escape-legally/

And if that article doesn’t convince you, watch this National Geographic episode with reporter Mariana Van Zeller’s investigation into rug pull crypto scams.

https://www.bing.com/videos/riverview/relatedvideo?q=why+do+people+want+to+believe+in+unrealistic+investments+when+they+know+it%27s+a+scam&mid=627AE2665C7B0A75B9C4627AE2665C7B0A75B9C4&FORM=VIRE

If you want to dabble, that’s fine. Limit your investing to discretionary amounts that you can afford to lose. Otherwise, stay in your wheelhouse – focus on what you know best and operate in that area of expertise. Get-rich-quick investing is a pipe dream. Remember that for every success story you hear, there are hundreds (probably thousands) of people who experienced the opposite. The reality is get-rich-slow-and-steady. Be content with that.