Apeing definition: Aggressive investment behavior without careful research, driven by FOMO (fear of missing out) sentiment.

Apeing refers to the act of rapidly investing in a new or trending cryptocurrency, token, or DeFi project without conducting in-depth research or due diligence. Typically done in anticipation of quick profits, apeing is often driven by FOMO, or the "fear of missing out," on potential gains.

When an individual "apes in" to an asset, they do so with the expectation that its value will rise rapidly, usually based on social media hype, trending news, or market sentiment rather than fundamentals. This can be particularly tempting in the cryptocurrency market, where assets can experience extreme volatility and prices can skyrocket within a short period. However, apeing poses significant risks and can often result in financial losses, especially for those who are not well-versed in the complex dynamics of cryptocurrency trading and investing.

The term comes from the idea that this investment approach is similar to jumping into a situation without much thought, similar to how one might imagine an ape acting. However, this isn't to trivialize the practice entirely; some investors have profited handsomely from apeing into the right projects at the right time. The risk, however, remains exceedingly high. Due to the lack of research and understanding, investors who ape into projects expose themselves to risks such as scams, 'rug pulls,' and extreme market volatility.

In terms of market impact, apeing can contribute to the formation of asset bubbles. When a large number of investors ape into a particular cryptocurrency or project, it artificially inflates the price and creates an unstable market environment. Once the initial hype fades, the inflated asset often undergoes a correction, which can be catastrophic for those who invested at the peak of its value.

Another point to consider is that apeing can also have ethical implications. The practice can contribute to the spread of 'pump-and-dump' schemes, where the price of an asset is artificially inflated to attract unwitting investors, only to be sold off by early investors for a profit, leading to a sharp price decline. New or uninformed investors are the ones who typically suffer the most in such scenarios.

Despite its risks, the phenomenon of apeing also reflects the democratization of finance that cryptocurrencies and blockchain technology aim to achieve. It embodies the ethos of open access and the possibility for anyone to invest in projects at an early stage, something that was largely restricted to accredited investors in traditional finance.

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Michelle Legge
By Michelle LeggeHead of Crypto Tax Education
Updated Nov 21, 2023
This article has been fact checked and reviewed as per our editorial policy.