Two radically different perspectives about information and markets

Using the Ethereum merge of September 2022 as an example for contextualization.

Perspective 1: it is already priced in

This is the perspective of the efficient market hypothesis. According to this hypothesis:

1. The information about this event has been available for a while,
2. actions were taken accordingly, and
3. any potential price movement has already happened.

i.e. after something has been reported when the information became readily available, there is no reason to write further about it other than new information being readily available, e.g. reporting results after it.

Perspective 2: people need to know about it

This is the perspective of:

1. every person writing about The Merge these days, some of them professional journalists,
2. the people sharing links about The Merge in social media like r/CryptoCurrency and Twitter, and
3. the algorithms recommending you news about The Merge.

Side note

These two perspectives (“efficient markets” vs “people need to know”) will still be around for the foreseeable future and apply well beyond Ethereum and cryptocurrencies.

“Wise people speak because they have something to say. Fools speak because they have to say something.”

Awareness about these two perspectives is useful to everybody, perhaps particularly useful to investors (and gamblers). The Ethereum merge of September 2022 provides a perfect example for easier understanding, but please do not stare at the finger pointing at the Moon.

Posted here after being deleted from r/CryptoCurrency.

Cross posted with permission.