about 1 year ago • 1 min
With ChatGPT all the rage these days, it’s no wonder a crypto project called Fetch.AI is absolutely ripping: its FET token (blue line) is up about 170% so far this year, and quintupled in value since its low last November. But if there’s one thing OG crypto investors know, it’s that you don’t chase the rally.
The reason is that it's just flat-out risky: as the rally gets hotter, so does the potential for a bigger drop. After a massive move higher, most altcoins tend to give back between 50% and 80% of their gains before the next bounce – landing somewhere between the 0.5 and 0.786 Fibonacci retracement ratio (I wrote an explainer on the Fibonacci sequence here). So that’s your risk of buying in when an asset’s on a tear like this one – the possibility of a 50% to 80% drop at any point.
As for FET: it was trading at 5 cents in November and is sitting at around 25 cents now. If it doubled again from here to 50 cents, it would have gone up 10 times since its November low. So by buying in now, you’d essentially be taking a bet that it’s going to do a tenbagger from the low without a rollercoaster dip along the way. Sure, it's possible, but you’d be playing with fire by taking that bet.
The project itself is a decentralized network that’s trying to build a smart, autonomous economy by combining distributed ledger, AI, and machine learning technology. It’s complicated, but the TL;DR is that developers can build and train AI agents to make independent real-world economic decisions on the network on behalf of their human owners. Whether or not it succeeds, it’s safe to say the future is going to look very different.
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