Sirwin
Sirwin

Mistakes of Naive Crypto Investors

By idiosyncratic | Idiosyncratic Crypto | 29 Jun 2023


It has been more than 6 years since I started my crypto journey. My first purchase was Bitcoin at $1000+ in the first quarter of 2017. As I was a student who was trying to survive, I was trying to save money from my limited budget to buy crypto. These days, Ripple had lots of zero's in its price while ETH was around $90.

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Though I was relatively early to the ecosystem, I had a fundamental mistake that killed my capital in years. Crypto is a game that you always win if you are patient enough! It is tech-driven like NASDAQ's top companies that are dominating the whole world's technology industry. Crypto, similar to Nasdaq, is a step toward the future of human life. Though the ecosystem if full of useless coins, just have a look at the astonishing benefits of crypto that directly affected the way we live.

While we are experiencing the historical moments in the paradigm shift to an information economy / attention economy, there will ways be ups and down.

My humble experience proved to me that you do not have to fight against downs by accepting the melt of your capital. This is a purely sad and educative experience of mine that I made this mistake for a very long time. I have witnessed 4 local ATH levels and respectively 4 local ATL levels so far.

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In 2017, I knew that 20k was going to be the top level that the price of Bitcoin can reach, yet, I did not take profit and wait for the buying prices. Rather than that, I kept BTC and tried to add up more in time. This was a highly problematic case because, first of all, I did not have enough funds to buy more as I was still holding BTC though it was in a downtrend, and my future purchases were too weak to grow a meaningful difference until another bull-run.

This "emotional decision of not selling BTC" ended up holding the capital and watching it melt for 2 years!

Crypto is the very first market in which you need to know when to realize your profit to make more gains, buy more of the token and sustain the growth of your portfolio.

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After a long time, when the market skyrocketed during the pandemic, I saw the divergence on the price of Bitcoin and you can see it clearly. I was holding a big chunk of BTC and the price was around $64.5k as I highlighted above.

I DID NOT SELL AS AN EMOTIONAL CREATURE!

Can you imagine? I know that is coming, I can read the charts and data but I chose to suffer in the upcoming bear market because I love Bitcoin!

Look what happened, I invested thousands of dollars into scams (starting with Bitconnect, cloud mining etc.) and now I have no advantage of being early in this ecosystem.

Possible Fallacies of Newbie Crypto Investors

Technically, it was my first time in a "market" where I can make money online. As I had limited knowledge, but I was reading a lot, of other markets, macro economy, trends and monetary system, I thought that bearing the bear market would not hurt.

A lack of knowledge is as harmful as approaching the markets emotionally. My biggest disadvantage was assuming that It might be possible to multiply my limited funds in crypto even if the market goes red. Yet, it was a disaster as you may assume! I screwed the whole portfolio because "crypto is the new generation of markets (!)"

I learned about the other investments, the markets and macro economy to understand the reasons why crypto market reacts negatively or positively. Back in years, crypto was just like a gamble without wagering for me. Adrenaline is the last ingredient that you need to have in your investment. This took years for me to learn and personalize.

Being emotional in the falling knife cases or taking profit times may really hurt your financial and emotional domains in the later phases of your life. I cannot count my regrets until today. Having too much intimacy to an investment or being stubborn not to open a sell order when you are at a loss are killers.

Timely Taking Profit & Sustainable DCA

Two important details of you are in a market and you want to be there in the long run.

First of all, set your take profit levels in your trades.

If you buy BTC at $25,500, you may need to determine the prices to take "some" profit while keeping the majority of your portfolio.

We may see it as reverse DCA in an uptrend.

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DCA is your friend if you can utilize its power. There is a little point to keep in mind: Do not start to DCA when BTC is at the ATH level with $69k!

DCA should be in a consolidation phase where the price has a certain vertical channel. DCA should be supported with Moving Averages and support / resistance levels, as well.

These are the things that I have experienced and there might be some tips to secure your mental, emotional, physical, and financial health.

Expose us to your wisdom below.

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idiosyncratic
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Crypto-Blogger 🖊Blockchain Gamer 🎮 https://read.cash/@idiosyncratic https://noise.cash/u/idiosyncratic1 https://leofinance.io/@idiosyncratic1


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