“Buy the rumors, sell the news”: How crypto investors often tick

If there are great innovations in crypto assets or in shares, but the prices hardly react – surprising to many – then experts like to say analytically: “That was already the price”. This means that technical improvements, such as those recently made with Ethereum (“The Merger”), are often known for months, and investors have long since made their investments in this regard.

This is what happened last week during Ethereum’s big move in proof of stake. Ethereum developers have been working on the monster project for a whopping six years, and the date has been pushed back again and again. Technically, he paid. After countless tests, at the end of the mining era they went smoothly (Trending Topics reported).

The Merger: Can Ethereum Be Better Than Bitcoin?

But you couldn’t really tell Merge off the course. Since the merger of the old mainnet and the new Beacon chain, everything ran smoothly technically, but since the morning of September 15, the price of ETH has not increased – on the contrary, it has fallen by a whopping 18 percent. Other crypto-assets have also fallen in price over the same period, but most of them not as significantly and in the range of single-digit percentages (e.g. Bitcoin by around 8 percent).

Of course, other factors also weigh heavily. Most likely, the next increase in US interest rates to the current 3 percent and more will happen later this afternoon in order to fight high inflation. But here, too, someone saw: Ethereum and Bitcoin fell at the beginning of the week (and before that) as a precaution, precisely in anticipation of the interest rate trip, which has already cast its shadow (Trending Topics reported).

But back to Ethereum: If you look at the course of ETH during the summer, you will see that Ether grew in price at a higher than average rate compared to Bitcoin. Here are the charts for the last 3 months:

Ethereum grew hugely before the Merger – and fell heavily afterwards

Here it is clear that Ethereum detached itself from the price development of Bitcoin in mid-July and rose more strongly. These were also the months leading up to The Merge, where the final date became increasingly clear. Although the Ethereum Foundation waited a very long time to communicate the exact time, new rumors continued to want to know earlier and predicted the time more and more accurately. This strengthened the Aether’s neck as well.

In the past with Bitcoin, too, one could see again and again that great innovations were priced in weeks or months before the actual happening. Several days before the big Taproot upgrade on November 14, 2021, BTC already reached a level of 69,320 euros on November 10, 2021. After that, things have mostly gone downhill since then. Crypto investors are now awaiting the decision of the US Securities and Exchange Commission in the case of Ripple / XRP. The decision has not yet been made, but based on rumors, the price of the XRP token has recently increased significantly (more on this here).

These examples and others show again and again: Despite all the data, graphs and technical analysis, the crypto market is very much driven by rumors and expectations about future events – and less by the hard facts, such as technical improvements. The turbo for spreading these market rumors is Twitter, Telegram groups and some blogs. An old business adage comes true again and again: “Buy the rumor, sell the news”.

“Buy the Rumor, Sell the News”: Battle of the Crypto Market Titles

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