What is aping in cryptocurrency and how to profit with it?
In the world of cryptocurrencies, there are many slang terms such as aping (or apeing). What does aping mean in crypto? Here is the answer.
Aping in the world of cryptocurrency represents the situation when traders buy a crypto token shortly after the crypto token project launch without running appropriate research.
It generally happens when traders are fearful of missing out, usually because they are fearful of missing out on potential profit that could be lost if they hesitate to conduct due diligence.
The slang term aping in crypto came into focus during the 2020 “DeFi Summer”, when an unannounced crypto token project launched led to a small proportion of traders making considerable profits from buying those project tokens within a very brief time frame after the launch.
As stories of these significant gains leaked onto social media, traders tried to emulate them by buying the crypto tokens of any newly launched project without conducting proper research. This ‘low IQ’ approach to detecting tokens to purchase is what gives apeing its name.
Cryptocurrency markets have been affected by FOMO almost from the start, mainly the so-called altcoins, and among these especially shitcoins.
FOMO ends up irrationally driving the price of many cryptocurrencies to exaggerated levels that have nothing to do with their true value, only to crash soon after to their fair value (which is often negligible), causing massive losses to traders who entered late just so as not to miss “a great opportunity”.
APING AND FOMO – fear of missing out is one of the main factors that entice aping.
On an individual level, FOMO stems from the feeling that other traders are making money while you stay away, and therefore you too want a piece of the pie.
Thus, it leads to a lack of long-term perspective, an unwillingness to wait, too much or too little confidence, and too high expectations. FOMO is emotional trading that lacks objectivity and, if left unchecked, can cause the trader to neglect their trading plans and take on too much risk.
To overcome FOMO in trading, you must overcome your negative emotions, such as greed, and anxiety. These emotions can keep you in the FOMO cycle, where you buy high out of greed, envy, jealousy, and excitement and sell low out of fear, anxiety, and impatience, only to be tempted to buy again when the market goes up and reaches another peak.
Aping – Characteristics of the FOMO Dominated Trader
Fear of missing out is a common enemy for all traders because it influences our decision-making as traders on many levels and can lead us to jump into trades too soon without confirmation and chase after opportunities that have flown away.
Only with good control of trading psychology can we master FOMO and prevent it from influencing our decision-making. However, not all traders have mastered their investor psychology. Many of them still act in a FOMO-dominated manner and generally share the following characteristics:
A FOMO-dominated trader wants everything now. If this is how you feel when trading, then FOMO is probably an issue for you too. You are probably thinking about how much money you can earn on a trade instead of focusing on executing your trades correctly.
The Herd Mentality:
A trader suffering from FOMO often likes to do things precisely because others are doing them and not because he/she understands why those investors are buying or selling a particular asset. In trading, following the crowd can lead to irresponsible investing and disastrous results.
Traders who are generally affected by FOMO are often impatient. They don’t want to wait for the right signal; they just want to enter the market because they are afraid that the price will move and leave them behind, robbing them of a great opportunity.
Some traders simply have very high expectations. They want to double their accounts in a few months, so they trade irrationally.
Lack of confidence:
For some traders, after several losing trades, their only goal is to try to recoup those losses in a short time and with a few winning trades. This leads them to open trades randomly just to make a quick profit and recoup their losses. Unfortunately, this leads to further losses.
No Long-Term Perspective:
FOMO-prone traders typically don’t approach trading with a long-term perspective. If that were the case, they would know that thousands of new trades await them and would hardly care about a single trade.
No proper analysis
Some traders affected by FOMO actually see the right trading signals well in advance but become paralyzed in their analysis and are unable to open their trades at the right time. When the price finally starts to move in the expected direction, they attempt to continue the trade, even though the price has greatly exceeded the optimal entry-level.
How to avoid the aping when investing in crypto token
Investing in a cryptocurrency always represents a risk. Thus, it is offset by sometimes spectacular profit prospects. With ICOs (Initial coin offerings), it’s the same concept, but on steroids: choose with precaution, and you hit the jackpot, make a mistake, and you lose almost everything. However, you can limit the risks by carefully selecting your ICOs. In this article, we offer some tips for choosing them well and not becoming the victim of aping.
The hard cap and the number of tokens
Before digging into an ICO, the first thing to look at is the number of tokens that will be offered for sale. Also, look at the soft and hard cap (i.e. the minimum and maximum amount of funds that the issuer of the cryptocurrency wants to lift).
This allows you to assess the market value of the cryptocurrency once the ICO is concluded and see how it ranks in the CoinMarketCap rankings. We can thus see that ICOs are placed directly in the top 100. Suffice to say that the upside potential is limited, even if the potential of the project must, of course, be taken into account.
The whitepaper and the site
Since the white paper is used to raise funds, it must imperatively be convincing so that investors want to invest a sum of money in the cryptocurrency. As a result, most whitepapers considerably embellish the critical points of the project.
Everything in a white paper is presented in the best possible way. There is not a single project that wants to use an ICO that will admit in black and white the shortcomings it has. It is therefore necessary to analyze this document with great care and to be able to detect certain intellectual dishonesty.
Before investing in an ICO, it is imperative to consult the background of the members of the development team. Then, you have to see if the promises made in the whitepaper are achievable and if there are not already competitors in the sector. Finally, do not hesitate to discuss with other crypto-investors to have their opinion on it.
The potential of the ICO idea
Many ICO projects are based on a proposal. Its scope is far too limited or uncertain to justify an investment on your part. Before committing, also check if the cryptocurrency you plan to buy will face any competition. The more a crypto token targets a new and large market, the more likely it is to establish itself and, therefore, to see its value increase.
The team behind the idea
Even the greatest idea will come to nothing if there is not a competent team to support it. The ICO website must provide the list of team members, which must cover all the areas required to carry out the project (technical, operational, communication, marketing, etc.). If there are 3 or 4 people behind the project, you should give up immediately. Advisors from successful projects are also a guarantee of security (but not certainty). Feel free to do some research on Google about the CEO and other key figures on the team. Sometimes we learn very interesting things…
A business in place
The principle of the ICO is to start an idea, so there does not necessarily have to be a structure in place that has proven itself. But from our point of view, it is a very convincing criterion. This proves that there is already a market, that the team knows it, and that it already has customers and partners.
The code on Github
In principle, the cryptocurrency code is open source and published on Github. People who have programming knowledge can take a look. If you know nothing about it, you can still check the activity taking place on the code in terms of updates and the number of people working on the project.
You can do your investigative work very conscientiously. The fact remains that participating in an ICO is always risky. However, we are convinced that by following the advice above, you will make more winning bets than flops. Finally, we hope we have helped you to grasp the meaning of the aping in cryptocurrency, its main pitfalls and the factors that provoke it.
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