You can do a lot of terrible mistakes in crypto space, especially as a newbie. Some of these mistakes can become quite expensive. 

My intention in this post is not to scare you but to help you to avoid the five biggest mistakes in crypto space. The best way to protect yourself from these mistakes is to know and understand them. Let me explain.

1. Degen Trading Instead of DYOR

One of the biggest mistakes in crypto space is trading and investing like a degen instead of doing your own research. Always keep in mind that you alone are responsible for your own investment decisions and no one else. You should always be able to live with the choices you made in the past and you should never blame anyone else for your financial losses. You should make the decision on your own because you understood the product that you want to invest in. That`s why it is so important that you always do your own research ("DYOR"). Doing your own research actually means reading a lot.

This is actually one of the biggest reasons why people get rekt in crypto space. They simply fail to do their own research and go degen trading. They buy coins and tokens because they rely on the tips from some twitter-famous influencers. Don´t do it. Instead, make sure that you have done your homework before you invest.

2. Fear And Greed

You need to understand that financial markets are mainly driven by two very powerful emotions fear and greed. When people get greedy, the prices are going up and when people become fearful, the prices are going down. If you follow these emotions yourself, you buy when prices are going up and sell when prices are going down. In other words: You buy the top and you sell the dip which is just degen-like. One specific feeling called FOMO is very prevalent in crypto. 

FOMO is a very important term in crypto space and means Fear Of Missing Out. This feeling is experienced when a cryptocurrency rises in its value significantly over a relatively short time. It can be described as a feeling of anxiety that other people are getting rich while you are missing out

The problem with FOMO is that your investment decisions are based upon emotion instead of logic and reasoning. It can often lead to a situation where trades are made for an asset that is overpriced, incurring much greater risks of financial losses.

When a cryptocurrency rises in its value significantly over a relatively short time then you are already too late. FOMOing in is dangerous. 

With greed, it is more or less the same as with fear and FOMO. When you become greedy, the risk to buy overpriced cryptos gets much higher. Also, the risks to fall for a scam are increasing massively. Keep in mind that the first ingredient for every successful scam is greed.

3. Keeping Everything on an Exchange

Promise me not to keep all your funds only on one single exchange. This is also one of the biggest mistakes in crypto space that you can avoid easily. Your account or the exchange itself can get hacked which happens frequently from time to time. It can also happen that the exchange holds back your funds for some shady reasons and require you to do some additional KYC to prove that your funds are from legit sources.

You can avoid all this trouble by keeping your funds in a wallet. So never keep all your funds on one single exchange. Only leave native exchange tokens (like BNB on Binance or KCS on KuCoin) on the exchange and those funds that you need for trading. Keep all or at least most of your funds in a noncustodial wallet. You should also consider owning and using a cold wallet like a Ledger hardware wallet. The biggest advantage of using a Ledger hardware wallet is the security as you are storing your crypto offline. A hardware wallet costs a few bucks but consider it as a small insurance policy. 

Store your hard-earned crypto offline away from the exchanges.

4. Losing Access to your Funds

Honestly, losing access to your funds is one most expensive mistakes you can make. It sounds so simple but it happens frequently that people are losing access to their funds. If this happens to you, you are facing a serious loss and it is hard to recover from it.

Make sure to keep all your keys and passwords safe, not only from your wallets but also from the exchanges you are using. Keeping them safe means keeping them offline on a piece of paper. The same applies to 2fa codes on your exchange accounts. Make sure that you have noted the backup codes to recover the 2fa in case you lose your smartphone.

There are so many stories out there from people having lost access to the funds, sometimes even worth millions of dollars. Don´t be one of them!

5. Getting Scammed

Finally, getting scammed is also one of those mistakes that can cost you a lot of your hard-earned Satoshis. Some scams are pretty obvious while others are quite convincing and more subtle. Scammers are evolving their methods all the time. It's a pretty complex topic that I have already covered in a separate post. So if you like, you can continue reading here: Scammers Never Rest - Cryptonator`s Ultimate Guide To Avoid Crypto Scams

My Final Words

I hope I could provide you with some interesting and useful information about the five biggest mistakes in crypto space so that you can avoid them.

Stay safe in crypto space and thank you guys as always for reading, liking, following, and tipping 👍

If you like, you can also follow me on Twitter, and also on noise.cash. This is somehow similar to Twitter but with free tips in Bitcoin Cash.

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