Overreliance on hype in the cryptocurrency market

Over-investment in hype is one of the critical risk factors in the cryptocurrency market that may result in unsustainable growth and eventual collapse. In most cases, hype only serves to trigger speculative investment, where excitement and FOMO drive prices to unsustainably high levels not fundamentally supported. Projects relying heavily on heavy marketing, celebrity endorsements, or social media buzz can only attract rapid attention; this attention is often fleeting.

The problem with hype-driven growth is that most of the time, it lacks content. So long as a project is more concerned with creating hype than building actual technology or a valid business model, it will ultimately let investors down when the hype dies out. This leads to sharp price corrections, similar to what has happened in numerous "pump and dump" schemes where prices skyrocket, only to plummet as early investors cash out.

Important considerations like security, regulatory compliance, and long-term sustainability will also be eclipsed by hype. Investors who get swept into the hype can easily forget these things, and when problems do arise, lose a lot.

In short, though hype may fuel the cryptocurrency market for short-term gains, being so overdependent on hype is dangerous. That only builds a dangerous ground of growth wherein value thrives by speculation rather than real-world usability or innovation. The way to achieve success in a sustainable manner is to focus on the fundamentals over the hype.

Thanks

src

~ Nesaty