Cryptocurrency: An Investigation into the world of Cryptocurrency Paid Groups

$trong
$trong
Jun 21 · 14 min read

Case Study: “AskMeHow” Paid Group Review

Learning Objectives

· To investigate and detail the functional aspects of the selected cryptocurrency based paid group.

· To produce a thorough and unbiased review of the selected cryptocurrency based paid group.

Introduction

This article forms part of a cryptocurrency-based paid group review and is the fourth edition in the series. This article will focus on the “AskMeHow” paid group founded and ran by an anonymous individual.

Qualification

Firstly, it is crucial to state that I was not granted free access to the group by the group’s founder. I was granted access by one of group’s members who was very concerned with how the group and its founder were operating.

I also received further direct messages on social media from other members of the cryptocurrency community, which questioned the previous legitimacy of the founder’s actions in other online areas, away from the group.

Furthermore, I was also contacted by another paid group leader that stated that “AskMeHow” previously joined their paid group and then proceeded to shamelessly attempt to poach their group members, before finally being banned from the group.

Source: Twitter

Source: Twitter

Source: Lightshot

Source: Lightshot

Source: Lightshot

Source: Lightshot

Source: Lightshot

Source: Lightshot

Source: Lightshot

In consideration of the above information, it was deemed that this group warranted further investigation.

Main Body

Attraction to Group

The primary outlet for advertising the “AskMeHow” paid group is derived from activity on the social media platform, Twitter. The group is managed anonymously and on commencing this article the account went by the pseudonym “AskMeHowLongIAm”, (we will come to this in more detail later).

At first glance, the Twitter account of “AskMeHowLongIAm” could appear attractive to a potential customer, who is considering joining a paid group. The account has a substantial following of circa 14,000 followers, having only being started in November 2018.

The account also contains a screenshot of a Bitmex leader board in the header of the page and a description in the bio of the “AMH Capital Discord Group”.

Source: Twitter

Source: Twitter

Social media accounts with high followers can gain the confidence of people with little experience in the cryptocurrency industry, as they seek people or brands that appear more trustworthy. There is potential to further convert these followers into paying customers of the brand having newly won over their confidence.

With reference to the follower statistics from the platform Social Blade (referenced below), an account with legitimate followers should have steady, consistent growth pattern over the period of time.

The follower count of “AskMeHow” has gained significant, sharp spikes in a time period as short as a day. With reference to the table below, it can be seen on 14/05/19 that the account gained 4,100 followers, and the following day there was a further huge spike of 1,917 followers being gained. It is highly unlikely that these followers have been gained legitimately and have are probably the result of being bought followers.

Source: Social Blade

With further reference to the graph below (also from Social Blade), it can be further recognised that these huge spikes in followers (6,000 gained in two days) simply do not align with previous growth trends of this account. This legitimacy of this account’s followers appears incredibly dubious.

Source: Social Blade

It is worth further consideration that during the time of writing this article, the Twitter account of “AskMeHow” rebranded for the third time, to “AskMeHowToSwing”.

Source: Twitter

The initial account was judged by some online cryptocurrency participants as being nothing more than a “meme” account, since “AskMeHowToShort” first arrived on Twitter. Furthermore some also consider that this account and “Majinsayan” are both ran by the same person. One account had a strong bear bias, the other a strong bull bias. The intended tactic with this is the account that makes the correct calls gets credit and becomes embedded into the world of cryptocurrency.

This notion has also been considered by some as the primary reason that “AskMeHow” briefly attained access to the Bitmex ROE (return on equity) leader board, by applying the above tactic to “trading”.

The thought is by setting up numerous accounts and setting up a small amount, high leveraged “trade” that they would be lucky enough to catch a trend. This is a simple, yet workable tactic on how to manipulate a position onto the Bitmex ROE leader board. The other method is by paying someone already on the leader board to adjust their username.

Source: Twitter

At the time of writing this article, the group had 234 members and had collected circa $61,000 in paid fees in their first month from group members.

Source: Discord

Source: Twitter

Source: Blockchain

Structure of Group

The “AMH” paid group use the Discord app and is structured in what appears to be the most common format of cryptocurrency paid groups. Group members pay the founders for access onto the Discord account, with access only being granted via receipt of payment.

The group is just in the process of completing its first month, after pursuing the gain of interest on Twitter. The pricing structure of the group is now at 0.03 Bitcoin per month, which based on current value roughly translates to $264.00 per month.

Source: Blockchain

The arrangement of the group’s categories in Discord is basic, but this should not be considered as a bad thing. Some try too hard to over complicate things unnecessarily.

Source: Discord

The first subdivisions that you will arrive at is the typical introductory sections of welcoming new members and providing general information to the group. The “welcome” section has yet to have any information posted in the first month of the group becoming live, and basically just informs other members on who has joined the group.

Source: Discord

Source: Discord

Source: Discord

Source: Discord

The “information” section of the group is the first communication that one will come across upon joining the group and it is here where a cause for concern begins. There is a contributor to the group under the pseudonym “Scalpy”, who relays information, and in this instance appears to be quite confusing and somewhat incompetent. It appears that group members have already begun complaining about the group’s “calls” with “AskMeHow” and “Scalpy” informing members to follow different outcomes on the same call. “Scalpy” has to then clarify that basically his “calls” or advice should not be followed over “AskMeHow”, which appears as a “get out jail” type statement on posting poorly organised information.

The remainder of the sections can be summarised into “calls” on Bitcoin, Ethereum and altcoins, as well as a general altcoin discussion channel where group members chat informally.

The group is very basic in its structure, which is not necessarily a bad thing, as previously mentioned. Simplicity is often a very underrated aspect. This brief note of positive sentiment is however completely superseded with the very poor information relayed by the group in these key introductory sections.

Structure of Group Verdict = 1/10

Frequency in Group & Community Support

The frequency in the paid group of “AskMeHow” and “Scalpy” is nowhere near active enough to qualify charging members a subscription fee for their time. Although they both make a post daily, it is exactly only this. The activity of each contributor is limited to two or three posts a day, with no further interaction or support of the group members that are effectively making payment to secure their time and assistance.

Source: Discord

It is significant to ensure paid group leaders are putting relevant time to the group, which the group members are financially covering. This is simply not happening in this paid group, and members are not being given fair consideration for their payment.

Frequency in Group & Community Support Verdict = 1/10

Call Frequency & Success

The trading calls produced by the “AskMeHow” paid group were followed from the group’s inception to date, which was mid-May 2019 to mid-June 2019. Bitcoin had been in an upward trend for close to 5 months, increasing from a bottom value of $3,200 per coin to around $9,000 per coin, with higher lows posted throughout the process.

The basis of the trading strategy of both “AskMeHow” and “Scalpy” appeared to be based on Price Action Trading, though it seemed far too sporadic in its detail to fully credit it as this. (Price Action Trading forms the basis of all technical analysis of an asset chart and tracks the movement of price over time. Some traders exclusively trust in price action and make trade decisions based on identifiable trends and formations. Technical analysis as a practice is a derivative of price action, as it employs previous prices in calculations that are subsequently available to assist with trading decisions.)

The “AskMeHow” paid group contains the majority of their trade advice in Bitcoin, Ethereum or Altcoin sections, which again is nice and simple for the user, without having too many sections to search between. The group has primarily posted updates in the Bitcoin section, which isn’t surprising given its movement. The basis of the “Call Frequency and Success” assessment will therefore concentrate on this section.

The group began with posting comments on Bitcoin, which initially commenced as bullish comments, though for new people this would hardly represent helpful information. The comments seemed to “flip-flop” in nature, and there was no supporting evidence to any of the comments that would assist the group members.

Source: Discord

Source: Discord

“AskMeHow” posted a chart on 28th May, which would be widely considered as nothing more than just that. These are regularly seen on “Crypto Twitter” where aspiring chartists submit generic charts to the wider audience for engagement. There is no key trade information contained on “AskMeHow” posts such as risk management, trade entries, exits and stop loss levels. It is basically a chart with a couple of trendlines demonstrated on it.

Source: Discord

Source: Discord

Just one week later “AskMeHow” posts a chart on 6th June, stating how they envisage that there will be a major drop in Bitcoin value to around $5100 per coin, before rapidly springing back up to around $7700 per coin. This is a further example of a generic chart being posted in the group with absolutely no supporting information to back up the thought process, let alone trade from it. This is also not to mention that it is inherently the incorrect method of how Bitcoin was trending during this time, an aspect that seems to entirely contradict their hypothetical price action trading strategy.

Source: Discord

The very next day “AskMeHow” recommends to the group to short Bitcoin, as they are looking for a “healthy retrace” down to a Bitcoin value of around $5100 per coin. In both the post below and above, the mention of shorting Bitcoin was stated after the very small retrace. It was reactive and without substance, with more of a hopeful bias that it would retrace lower to $5100 per coin. This was nowhere near close to happening.

Source: Discord

“AskMeHow” goes on to comment that there will be a very low likelihood of Bitcoin bouncing at $7,200 area and is again hoping for a deeper retrace. Furthermore, it is concerning that they openly mention to their group that “we can’t pretend like we have a crystal ball.” This emotional and baseless statement is what any good trading tutor should be steering their student away from, with educational and resourceful information.

Source: Discord

“AskMeHow” continues with very vague comments and charting on remaining bearish and ignoring the clear bullish trend of Bitcoin, something that the account had done on their Twitter from the bottom of the market. This type of behaviour seems to manifest itself in people with less experience in live market conditions. It is not enough to simple research trading literature alone, and to believe that this is an acceptable acquirement of knowledge to be able to fully handle live markets.

Source: Discord

Source: Discord

“AskMeHow” appears to display this lack of experience on 12th June, where he describes his trial of thought on trendlines being a trap. This may very well be the case in some instances, though an established trend is your friend, until it isn’t, if accordance with an individual’s training plan. There is a clear distinction between managing the risk of a trend breaking in a trade (something that hasn’t been shown in this group), as opposed to fighting a trend to suit your emotional bias on what you want to happen (which is clearly been shown in this group).

Source: Discord

This trait of trading on emotion with no risk management or education to the group continues when “AskMeHow” enters yet another short.

Source: Discord

Further evidence is displayed on 13th June that “AskMeHow” is no different in his paid group to how he posts on Twitter. With reference to Discord post, his Twitter post and the post in Discord in the “information” section on 29th May, regarding “Don’t take any tweets posted by AMH seriously. His strategy will be posted here” (on Discord). There is a clear invalidation of this claim with almost the exact same tweet and financial advice to his paid group on Discord about shorting Bitcoin to around $6,000 per coin. Bitcoin subsequently pumped to over $9,000 per coin.

Source: Discord

Source: Twitter

Source: Discord

In summary, the group founders did not at any stage provide any risk management to support their “calls”, traded out of emotional bias and relayed the entirely wrong message on how to behave in live markets to their students. They posted a couple of messages daily in the group, but were no where near activate enough to justify any sort of payment. At no stage was there any evidence of a group member being supported in any sort of way. It is hard to envisage if any of the group members would have any money left to trade, if they were consistently following all of the group founder’s advice.

If you want to join a group to see how it should entirely NOT be done, then this is the group for you.

Call Frequency & Success Verdict = 0/10

Case Study Verdict / Conclusion

The setup of the “AskMeHow” group is very basic, and this would prove simple enough for most people to be able to navigate around its format with ease. The monthly subscription fee is very expensive from what is on offer, as it increased from 0.01 to 0.03 worth of Bitcoin in just a couple of weeks.

The call success of the group, also considering it is the first month of the group’s formation, is appalling. It will come as a surprise that the current group members have not become entirely liquidated in the first month. The group appears to post “calls” that are very bold yet have little substance to substantiate such certainty. Also, it is doubtful that these claims could even be considered as credible information to trade upon. It causes significant concern that there is no mention of any risk management advice in the entire first month of the group. There is no mention of stop losses on any of their “calls”, and no supporting advice to new members on how risk is calculated and managed. The founder is basically posting a chart.

To summarise the overall verdict, the group essentially charges new members to inform them on how to do everything wrong in terms of trading. This group is a classic example of what is wrong in the world of cryptocurrency, as any inexperienced person or even scammers, can set up a group after buying followers and start charging new people to this space by deceit. This ultimately harms the industry, as it is a very negative experience for new people, who will most likely lose a lot of money.

Final thought, it is a struggle to find anything positive about this paid group, and potential members should be aware that joining this group is a very high risk to their finances.

Overall Verdict = 0/10

Closing Statement by The Author

My work is totally free and is to provide credible sources to help others. If you appreciate the time I have spent and would like to make a gesture of goodwill donation, please see my cryptocurrency wallet addresses below:

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If you would like to continue to follow my work, please follow my Twitter Account @StrongWriters.

Thank you for your time and I hope that you gained something valuable from this article.

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