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I realized the year 2021 is actually a year of ATHs (All Time Highs) and rug pulls, with the crypto market experiencing dips near the end of the year and further to 2022. I am sure you know about these already. That is why I assigned this post under my "The Basics of Crypto" blog, but a refresh will never hurt. Hence, I wanted to share my understanding of an ATH, a "Dip" and a "Rug Pull". Aside from this, as a continuation of our Cryptonyms post (), we have covered
What is All Time High (ATH)?
All Time High (ATH) is the highest price or market cap that a coin has reached since its listing in the exchanges. You will normally see a top coin in the headlines once it reaches an All-Time High, e.g. the last ATH for Bitcoin was last November 2021 when it reached $69,044.77
ATHs are important as it signals if an asset (a coin) will potentially go through or has entered a bull market.
A dip is a fall in value of a cryptocurrency. You hear this most often when someone says "Buy The Dip" (BTD)"Buy The F*ckin' Dip" (BTFD)
Same with All Time High, there is an All Time Low (ATL). This can also be measured or recorded per day, week, month or year. But usually, the All Time Low at any reference point is just referred to as the dip.
Dips are important as it signals if an asset (a coin) will go through or has potentially entered a bear market.
The "dip" is part of a cycle with the "high". In this cycle, the low follows the high and vice versa. There is always a price correction that happens during the cycle. But if the coin is resilient, long-term, the investors should have steady returns.
After its ATH in November 2021, Bitcoin dipped to around $42,000 as of this post. You can see the price drop since All-Time High in 2021 for a coin in Coingecko Price Drop Since All Time High. Note that this is in Beta stage at this time.
What is a Rug Pull?
A "rug pull" is an informal term for a type of cryptocurrency or crypto project scam where the owners/ developers depart a project with the user's funds.
Per Coindesk, rug pulls only accounted for 1% of crypto scams in 2020. But, this increased to 37% in 2021. In short, rug pull revenue was at All Time High in 2021. The top rug pulls of 2021 can be seen in the chart below from Chainanalysis.
Rug pull schemes may differ in approach and in execution, but they have all the same approach. Users are baited to shell out their money or funds to buy a token or NFT, then the malicious developers will wait for the opportune time to wipe out the liquidity of the token, pocketing the entire amount. The project's social media accounts are then closed or deactivated and the perpetrators, who are using pseudonyms, will vanish into thin air with the funds.
The users, on the other hand, will start seeing failed transactions when they are trying to unstake their funds. Later on, realizing that all their funds were lost.
Conclusion
If you are interested in seeing what an ATH, Dip or Rug Pull look like in a chart, you can see the charts in the embedded BlogToon (see below).
The ongoing mainstream adoption of cryptocurrency and blockchain caused coins to reach multiple ATHs in 2021. This correlates well with the increase of rug pull scams, i.e., scams go where the money goes.
The dips being experienced right now is caused by multiple factors, and these factors may or may not counter the risk of rug pull scams (e.g., regulation), but we will journey through it together and discover for ourselves.
BlogToon NFT Project
I would also like to take the opportunity to promote my project - The BlogToon NFT Project. We have exciting times ahead for the crypto industry and good or bad, we do not want to miss it. I am also motivated to write more blog posts so I had this idea. I will write a blog post on a periodic basis relevant to the current state of crypto, e.g. a crypto event or news. For each post, I will randomly embed and mint an original digitally hand-drawn cartoon in OPENSEA Polygon chain. It may be a gag, comic strip, editorial or illustrative. Each blog post will have a corresponding 1:1 NFT cartoon (BlogToon) that will subsequently be available for collection from OpenSea (check Twitter/ Instagram for the drop). When you get a BlogToon NFT, you will get a piece of crypto history. A link to the blog post (soon its own website) will be part of the NFT unlockable content to explain the story behind the cartoon, as well as other freebies (as applicable). The first drop is above and stay tuned for future drops.
For this drop and future drops, follow BlogToon Instagram
Hope I was able to provide some useful insights. If you reached the end of this article, thank you. Please show your support with a like, comment or a tip. It would be greatly appreciated. Please follow Marcusblue Instagram pages. Thank you for your support and appreciation.
