Smart Money: The Reality...

In my @leofinance post yesterday, I stated my case on why retail investors are so important for the crypto market, what we can learn from them, and how they impact the market. Today, I want to look a bit into what we sometimes call smart money.

Smart money is often associated with big money, but big money is not always smart. Proof of that is the guy from Korea who managed to wreck $12 million dollars on leverage trading.

We often like to believe that Wall Street is the epitome of success in trading and investing, but when we pay attention to its behavior and psychology, we can see that the situation is not that clear and simple. Just have a look at Bitcoin recently and the ETF inflows.

After the spot ETFs were approved in the US, Bitcoin became a "valid asset" that was now available to many types of investment funds and big-money investors who did not have access or interest in buying it while it was nothing more than magic internet money that degenerates speculated on for over a decade.

For a good period of time, we have seen billions upon billions in net inflows for the spot ETF issuers, and as BTC climbed above $70,000, the appetite of so-called smart money was obviously on an irrational growth. Everyone and their mother was sure about the ETFs pushing BTC to $100,000 by mid-summer, but here we are close to that point, and no signs of $100,000 BTC.

The inflows recorded for the spot ETF issuers are negligible in comparison to what they were two months ago, which means investors' appetite for buying paper Bitcoin has weakened severely. We can say that these people/institutions were more comfortable investing in BTC at $70,000 than they are now at a discount.

So, does that make them really that smart? Not really, if you ask me, because smart money buys when there is blood on the street and sells during euphoria, but what we've seen with the spot ETF inflows and outflows tells us a different story.

Big money was simply lured in by FOMO, quite similar to us plebs, and they are now sidelined, not buying at a discount. They got fooled by so-called advisers who took their commission for their shitty advice and are now frozen somewhere between the clouds.

If you or I would show our portfolio sizes to the so-called smart money, we would definitely be called dumb money, but believe me when I say: most of us here are outperforming many so-called smart money investors by a large margin. Size does not matter in crypto oftentimes.

Timing, experience, conviction, discipline, and a clear vision separate winners from losers, no matter the size of the portfolio. Just my two cents on this torrid end of the week/month. Have a great one, peeps, and see you all tomorrow.

Thanks for your attention,
Adrian