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Ask CryptoVantage: What Makes Cryptocurrency “Moon”?
Why are crypto users so obsessed with a certain celestial body? Well, going to the “moon” in crypto is what people like to say when a cryptocurrency goes on a huge bull run, sometimes doubling or tripling value within a very short time frame. Bitcoin is the original cryptocurrency that went to the moon. People are often looking for the next crypto to moon, meaning they are looking for an undervalued asset primed for a take off.
But what makes a cryptocurrency moon? Well there are a number of factors, some of them are rational, and some are not. In this edition of Ask CryptoVantage we will look at the reasons why a digital asset ends up out in space.
Hype/Fear of Missing Out (FOMO)
One of the biggest reasons a cryptocurrency moons is because it is being hyped up, either by a well-known investor, a marketing team, or even just a friend. Once an asset receives enough hype, the price inevitably will rise as people look to buy their share before the asset takes off like they are being told it will, this alone can drive up the price.
Then, in conjunction with hype, we have fear of missing out, or FOMO as people like to say. Once hype has an asset on the upswing, it can make those who have not yet invested feel like they are missing out on an opportunity, so they begin to buy as well. The combination of hype and FOMO can be enough to make a crypto moon. But keep in mind that assets that move due to hype and FOMO almost always come back to Earth.
Announcements/News
A more rational reason for a crypto asset to moon is announcements and news. This can mean a variety of things.
A project may announce that they are moving to their own chain (such as THETA did recently), a new token airdrop for stakeholders, a change to the network protocols or any other number of things that will create more value and utility for the asset. This is turn drives the price up as investors speculate on future values of the coin or token.
New Partnerships
Another more rational reason for a digital currency to moon is if they form new partnerships with other blockchain projects, governments, companies, etc.
This can be in the form of actually verified partnerships, such as THETA and Sony Europe recently, Cardano and GLOW, or Ethereum and Optimism. It can also be in the form of speculative or expected partnerships, such as the Cardano and some government in Africa, no one knows which one, but the partnership is expected.
Bull Run/Market
This is the most obvious reason that a crypto goes to the moon, a bull run refers to when the market is rising or expected to rise.
In this situation the “bulls” are buyers who believe there is opportunity and they begin buying up a cryptocurrency, pushing it to new highs, and once a new high is reached, the run can continue past the moon, but at some point prices will correct, so be careful when buying into a bull market.
