What Are The Challenges of Being a Bitcoin or Crypto Investor? Let's Explore This Emotion Practically !
Crypto Opportunities & Promises :
The rise of bitcoin, the decade-old crypto to its current fame of being an inflation hedge and to be touted as a true digital store of value akin to Physical Gold, has given new hopes to millions of new-age investors. Ethereum with its proven blockchain ecosystem with hundreds of Dapps and with the Rise Of ETH to second most valuable crypto has given a strong base to thousands of altcoins, to thrive & sustain.
The last two years have been quite significant for crypto & blockchain tech, the reason being the rise of Decentralized finance(Defi) & applications(Dapps) where now users can also lend and borrow their accumulated crypto funds and put it to earn while one sleeps.
The concept of yield farming, crypto staking, and pooling all have led to the birth of many more channels for crypto investors to generate more passive income apart from seeing them grow by trading on centralized exchanges.
But behind these promising current and future, also lies a lot of uncertainties, fear, and questions that need to be explored. Not everything is as simple as it looks when it comes to crypto investment, one has to go through a lot mental stress and needs to show a strong character to sail through this ocean full of hopes and opportunity
Emotional Crypto Quotient :(ECQ)
Recently Crypto investment has captured the imagination of one and all and has generated loads of emotion and passions amongst the curious crypto enthusiasts. This emotional aspect is what I want to discuss and explore today
Those crazy ones who have spent a good 8–10 years being invested with Bitcoin and Ethereum know, what kind of emotional dilemma it takes to stay invested in the same maintaining all the calmness and passion required. Small and big traders, retail investors, first-timers all go through a lot of emotional drama and indecisions before getting into this lucrative crypto market.
So bigger question which needs to be pondered is,
“Is it as easy as it sounds? What kind of EQ is required to be a crypto investor after all? ”
What Has Been My Experience?
As a tech & product leader, I have spent good 8 years in the crypto world, stayed curious & mesmerized for a long, discovering and understanding the underlying technology and functioning of some awesome crypto projects. I must admit what I know is just a spec and often feel the need to spend even more time to really understand the true hidden potential.
So I feel that one should avoid listening to what’s being talked about and debated, instead one should be ready to get hands-on experience leaving out all the assumptions and speculations. You will have to be ready for the black swan events in the crypto market and also to suffer the losses if you eventually want to gain big time.
In crypto market also:
"Pain is inevitable & suffering is a choice "
Challenges Of Being A Crypto Investor:
It’s highly volatile & Unpredictable :
Every experienced campaigner in this crypto world knows that timing the crypto markets and their return are extremely difficult, the reason being the volatility attached to this, Bitcoin leads this trend and sets the precedence for other small & mid-cap coins. On any given day, it can give a return of 30–40 % and also can drop down to 40–50 % & beyond without any specific reason or negative market sentiments.
Yes Analytical System Do Exist Now: But Still Challenge remains to decrypt & comprehend it
Also predicting the trend is not very fruitful with crypto, because it can stay down consolidating for weeks or for months, but also has the tendency to suddenly spike up to a new all-time high. Earlier there were not many analytics platforms like Glassnode, CryptoQuant, which one can use to track to get the gist of what bulls & whales are up to, how their bitcoin or stable coins are moving from private wallet to the centralized exchange or vice-versa to understand whether there will be a normal or huge spike or sell-off.
But even with this intelligence in place, one cannot make a concrete decision on whether to invest further or to wait for the correction or to book the profits.
Crypto Investing Can be highly infectious :
There are lots of rags to riches story around Bitcoin & Ethereum, but one thing which is least talked about the dark phases, the hardship and emotional outburst which those people has to go through to attain that Crypto Billionaire status. New-age investors can be easily fascinated by those stories and also by the hope of becoming rich quickly through crypto investing.
Yes it has all the charm and flare to easily pull you in to this investing world of crypto , but one need to be cautious and wise enough to understand that crypto investing is the journey & not the destination.
So if you feel that you can be a part of this game and happily go through with hefty returns easily, you may be in the wrong place for the wrong reasons. It can be difficult to stay afloat in this market with this rosy idea, as the reality may hard to digest.
It will test your patience every day, every week, every month & every year:
If you are one of those who likes to check your crypto wallet every few, minutes, to see the gain & loss associated with the crypto portfolio, you may end up getting too stressed out and frustrated, as the price changes happen very sharply in both upward & downward directions.
One needs a hell lot of patience and conviction to stay investe to make an actual fortune. No body can deny the fact that if you have right kind of mindset and have the calmness to go long this crypto can change your life in a positive way.
Crypto investments have all the ingredients to help you achieve the desired goals much faster, but one has to be strong-headed to traverse this path full of challenges, it comes with a high level of risk which can only be soaked if you have the determination to stay invested with longer time horizon.
Even if you are a trader you need to have sufficient mastery over data crunching, trend mapping, and understanding the charts with the required caution, else a lot of optimism blindly can be financially damaging. Talk to the experienced traders, they can be the guiding light to help you act real.
“So if you have the patience and are aware of the risk associated, you can leverage the opportunities of the crypto market to your benefit”
Concluding Food For Thought:
That if you are willing to burn oils to first get enough education around crypto projects and their fundamentals, which are already available in the form of experienced investor blogs, Vlogs, and documents. Also if you are a curious soul with a pure hunger to get deep, you can knock on the door of those investors who have been there & seen all the pain, trauma but still remained calm and composed, you will have the right kind of foundation to change your fortune and future for sure.
Dreaming big and being hopeful is not a problem, the problem lies, in not factoring in the risk, not educating yourselves, and in nurturing the quick-rich dreams.
In a nutshell:
Start small, invest only what you can afford, stay curious & most importantly avoid being too emotional with crypto as it can work against you.
This article was originally published on my Medium account, Here is the link:
Opinions expressed here at CryptoWise are not investment advice and are only for educational purposes. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency, or digital assets. Please be advised that your transfers and trades are at your own risk, and any losses you may incur are your responsibility