Buy Crypto Rumor, Sell Crypto News…

Hey Market Pilots,

Well, it was an active day in the cryptos with the Coinbase Global Inc. (COIN) Initial Public Offering (IPO). The new ticker COIN ran up massive value in the hours prior to opening, debuting around $400, and peaking at $430 before it careened downward. Its final closing price was practically at the lows at $327.

Many of the Bitcoin-related names caught bids last week and were up to today, most likely with the expectation that the COIN release would cause a flurry of action to the upside. I believe the most notable and strongest of the moves leading up to the release was MicroStrategy (MSTR) which spiked nearly 20% a few days ago. A little leftover momentum had the stock open higher, but then it spent the rest of the day heading south, right back to where it came. 

Marathon Digital Holdings (MARA) and Riot Blockchain (RIOT) were the other notable tickers that moved up quickly (or tried) leading up to the event, only to be driven down upon the COIN release. These moves are the definition of “buy the rumor, sell the news” and I am sure many traders felt significant pain today.

It can be very difficult to know what events will actually spark a serious run, especially ones that have been anticipated or telegraphed for a long time. Think “stimulus bills” and how the final passing of them didn’t do anything for the market. So, with the passing of the COIN IPO, we now can clearly see that the moves were all a lead-up to the news, which then got sold.

If this phrase is new to you, start thinking of it when it comes to your decision about buying something based solely on a news event.

Your Profit Pilot, TG.


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