The world of cryptocurrency is constantly evolving, giving rise to new terms and strategies. One such phenomenon that has captured the attention of traders is “apeing.” Let’s explore what apeing means and why it’s a relevant term in the crypto community.
The Origin of the Term “Apeing”
Apeing originated in the world of finance and trading, but it was during the 2020 “DeFi Summer” that it gained popularity in the crypto community. Sudden and unannounced token project launches led to a small proportion of traders making significant profits from buying those project tokens within a very short time frame after the initial launch. As stories of these substantial gains spread on social media, traders tried to emulate them by buying tokens of any freshly launched project without conducting thorough research.
This ‘low IQ’ approach to selecting tokens to buy is what gives apeing its name. And the fact that everyone and their mother were trying to enter the BAYC without knowing what they were doing just boost the term in the NFT realm.
Understanding the Apeing Strategy
Apeing is when a crypto investor purchases a token shortly after the token project’s launch without doing extensive research, typically out of fear of losing out on potential gains that might be missed if they wait to conduct due diligence. This ‘low-IQ’, ‘monkey-like’ behavior of buying without thinking or researching has been associated with the term.
Traders that engage in apeing tend not to do substantial research before buying. These purchases are often driven by fear of missing out (FOMO). Apeing became popular during the 2020 DeFi Summer, when a large number of sudden and unannounced token projects were launched. Traders who bought the tokens of these projects soon after their launch made notable profits, leading to a bigger wave of apeing behavior.
Notable Examples of Apeing in Crypto
Apeing has led to both success stories and cautionary tales in the crypto world. In the summer of 2020, YFI emerged as a DeFi project with a rapid increase in value. Early apers who invested in the project without much research saw massive gains, as the token’s value skyrocketed within days of its launch. This success story encouraged more traders to ape into new projects.
Another example from the 2020 DeFi Summer, SushiSwap gained traction quickly, attracting investors who hoped to replicate the success of other projects. However, controversy arose when the project’s founder, Chef Nomi, sold a large portion of his tokens, causing a sharp drop in value. Many apers suffered losses as a result.
Benefits and Drawbacks of Apeing
- High returns on investment: Apeing can potentially lead to high ROIs for traders who are fortunate enough to pick the right projects. Early investors may benefit from significant price increases following a project’s launch.
- Early access to promising projects: By apeing into new projects, traders gain early access to potentially promising projects before they become widely known or popular.
- High potential for loss: Apeing can lead to significant losses if a project fails or if the token’s value decreases rapidly. The lack of research and due diligence increases the chances of investing in a project with poor fundamentals.
- Scams and rug pulls: Apeing makes investors vulnerable to scams and rug pulls. Fraudulent projects may lure in traders with the promise of high returns, only to disappear with investors’ funds.
Strategies for Responsible Apeing
To engage in apeing responsibly and minimize risks, traders can follow these strategies:
- Diversify your portfolio: Balance high-risk investments by maintaining a diversified portfolio, including more established cryptocurrencies and other assets to spread the risk.
- Conduct thorough research and due diligence: Before apeing into a project, take the time to research the project’s fundamentals, team, and potential use cases. Investigate the project’s smart contracts and seek external audits to ensure their security.
- Set clear investment goals and limits: Establish your investment goals, and set strict limits on the amount you are willing to risk in apeing ventures. This will help you avoid overexposure to high-risk investments.
- Engage with the crypto community: Seek advice and opinions from experienced traders and experts in the crypto community. Participate in discussions on social media platforms, forums, and chat groups to gain valuable insights and perspectives.
To wrap things up, its critical to note that apeing is a high-risk investment strategy that has gained popularity in the crypto world. It’s essential for traders to understand and manage the risks associated with apeing and make informed decisions. By staying informed and making responsible investment choices, traders can navigate the exciting world of cryptocurrency safely and profitably.