Over 20 days after the US SEC approved the first set of Bitcoin Spot ETF applications, everyone seems to have forgotten that such an event occurred. The price of Bitcoin saw an immediate climb from $45k to the $48k region before sharply reversing its course, to prices below $39k. Many believed that the approval by the US SEC would begin the long-expected bull run, but alas, we are nowhere near it.

Following Grayscale's victory over the US SEC regarding its decision to convert the GBTC into a spot ETF, Bitcoin and many alts saw massive gains, with Bitcoin breaking out of the $20k-$32k range it had been trapped in for months. Solana was the alt of the year as it made 10x gains between that day and the date of the approval. The Fear and Greed index finally went above 50, indicating more confidence among crypto investors. Everything was perfectly poised for a rush to new all-time highs, so what happened?

Buy The Rumour, Sell The News

Have you ever heard the saying: "Those who forget history are doomed to repeat it"? It's a famous classic that is used in all walks of life and spheres of influence, with finance and investing being no exception. Throughout the history of the cryptocurrency market, major events which were supposed to be defining took place and never lived up to the hype they built upon. Think back to Ethereum's last major upgrades that made it a deflationary asset and changed the consensus mechanism from PoW to PoS, so many influencers and crypto gurus were saying that it was the biggest upgrade in crypto history and that $ETH was bound to break $5k. Well, that never happened. Ethereum may have changed to proof-of-stake, but it's still a costly network.

The same applies to bitcoin's price during the build-up to the ETF, FOMO was everywhere as people were scrambling for change to buy bitcoin. Michael Saylor didn't help matters as he purchased another 14,620 bitcoins 14 days before the spot ETF approval. The price kept pushing past psychological markers and everyone was anticipating $50k, which hasn't come obviously.

Bitcoin's price action post ETF approval.

You see, the anticipation for the spot ETF approval is a repetition of history in the crypto market which nobody paid attention to. When a major event is announced or approached, hype builds up and pandemonium runs rampant. FOMO grips the minds of many as they throw out every sense of reasoning and throw money into the hyped cryptocurrency, hoping for returns. People buy the rumour, and I say rumour because the event is only a speculation, as it has not happened yet. It's the hopium and hype around the rumour that drives the price up

As long as it isn't official or confirmed, that is the time to buy the cryptocurrency. Once the rumour is official and confirmed, it becomes news and that's the time to sell off. The hype will die out and everyone will immediately look for the next thing to hype and throw money at. Bitcoin's price will climb up in the long run but now isn't that time.

I'll elaborate on two previous "buy the rumour, sell the news" cases that will make it easier for you to understand what I'm talking about.

1. Messi Arrives in Paris

With his contract running out and La Liga implementing new FFP regulations, Messi was running out of time to renew his contract with Barcelona. Once rumoured to be on a $1M+ per week contract, the football ace had to reduce his wages to less than $200k per week. While Messi reportedly tried his best to get his wages down, he and Barcelona couldn't meet La Liga's deadline, forcing Messi to make a shocking decision: he was leaving Barcelona.

There was a whirlwind of rumours swirling around the World Cup winner: where would he go? How much would he take? etc. Messi left all the speculation to focus on the Copa America with La Albiceleste, eventually emerging as winners. While on international duty, the rumour that Messi had reached an agreement with PSG gained traction as many top sports journalists began to report the specifics. Though unofficial, the idea of Messi plating at Parc de Princes and Not Camp Nou was mind-blowing. Everything about that transfer window was centred around Messi and PSG.

Just as Ronaldo caused Coca-Cola to lose $4 Billion in a day when he moved their product away from his table, replacing it with water; Messi's potential arrival in Paris caused serious financial movement. PSG worked with sports-focused crypto company Socios ($Chiliz) to launch their fan token for their most loyal fans, also known as "socios'. Fan tokens are cryptocurrencies launched by sports teams that offer certain privileges and rights to holders of these tokens, in exchange for liquidity provided to run certain club operations.

The PSG fan token experienced a surge in its price as speculators rode the waves of this massive transfer, enjoying returns of over 400%. Its ATH came the day the rumour became news, with the price dropping hard after 10th August 2021 when PSG officially announced Messi's transfer. The price would eventually drop below pre-Messi transfer levels, setting new ATLs.

The PSG Fan token gained over 450% in value during the "rumour" period of Messi's transfer.

The PSG fan token lost all its gains and went down further, breaking its previous ATL.

The rumour was bought, and the news was sold.

2. Elon Becomes a Comedian

2021 was the year of Dogecoin and its kin, the meme coins; and they owe it to the billionaire founder of Tesla, Elon Musk. I don't know what he saw in Doge, but he absolutely loved it and used it to troll the internet. He got a shiba inu, which is the face of Dogecoin, there were leaks of Tesla coding in Doge as a means of payment for Tesla products., he kept tweeting about it causing immediate spikes in its price

I remember the first surge Doge experienced, going from less than 1 cent to over 10 cents. It was early 2021 and the surge was fueled by Wall Street Bets saving Gamestop from corporate greed and Elon playing along while striking Doge with him. he gave many reasons why Doge is attractive and that he already contacted the creator of Doge to see if it could be upgraded. All this gave serious hype to Doge as many believed it was the start of mass corporate adoption.

Doge price action over the past 3 years. Point 1 was the first surge and point 2 is the main surge from Elon's announced SNL performance. After his performance, the Doge hype died down

The big surge came in Apri when it was announced that Elon Musk would host SNL on May 8, with the theme being "The DogeFather", a throwback to the hit crime cinematic trilogy The Godfather. This meant that Elon's performance was to be centred around Dogecoin. SNL is a late-night comedy show that has aired for decades and is very popular in many parts of America. The announcement caused a rave on social media. It was the most anticipated event of the year and the price of Dogecoin reflected the anticipation built by crypto users during this period.

May 8 is the day Doge created its ATH, before its eventual descent. Peep the price action before SNL and after SNL.

Nobody knew how his performance was going to go, but we knew one thing: Elon likes Doge. Doge soared to a new ATH, almost 10x of its previous ATH (1000%+). The ATH was recorded on the day of Elon's big performance. After the performance, there was an immediate drop in price for Doge as the Elon SNL skit had passed and Elon's performance was viewed by most as "underwhelming".

Before his official appearance, Doge reached new highs as people bought into it, waiting for the Dogefather to either hit or miss. After his appearance, the hype died down, Elon didn't talk as much about Doge anymore and its price suffered major blows over time, which resulted in a complete wipeout of all the gains it made. We bought the rumour (Musk to host SNL) and we sold the news (Musk's performance was very underwhelming)

This phenomenon will continue to occur in the crypto space so you need to learn how to profit from big changes in the real wold and their effects. Read this article and go back to major events that influenced cryptocurrency prices. Learn how to take advantage of such situations and position yourself for future events.

Don't forget to upvote and share this article, thanks.

Till next time.