Forming a bad habit is something that can change your life for the worse. Affecting things like your health, happiness, and even relationships with the most important people in your life. Forming bad habits in the cryptocurrency market can be the difference from you changing your life financially in this market to losing everything.
Thankfully for you and unfortunately for others, there are countless stories of the mistakes that people have made since they first began investing in Bitcoin and cryptocurrency. If we use this wealth of knowledge to our advantage and learn from those who entered the market before us, it will already put us ahead of 50% of the people who enter this market. As the famous saying goes, “knowledge is power.” In this case, each bad habit is different in scale. Some of them are quite simple, and will only save you a little bit of crypto here and there. Others are major and could save you from making a fatal crypto mistake. One thing is certain, however. The longer you are in the crypto industry, you will see prices rise significantly. Those small mistakes quickly become large in value. And those already large mistakes become setbacks that you will regret forever.
Leaving Crypto on Exchanges
As simple as it sounds, once you have any significant amount of crypto on an exchange and feel confident of your knowledge, you should begin taking self-custody. This is something that many people learned the hard way during this cycle. “Not your keys, not your crypto.” When insolvencies spread, and the market began panicking, people tried to withdraw their funds as fast as possible. In some cases, withdrawals were delayed which caused extreme stress for the user. In other cases, withdrawals were frozen and they no longer could access their crypto. They learned that it really wasn’t their crypto.
Going After as Much Yield as Possible
This is a continuation of the first piece of advice. The crypto market is an industry of greed, and that really shined through this cycle. People were going after as much yield and interest as possible. Even if it seemed too good to be true, or was junk crypto that would trend to zero.
They also began trusting 3rd party lending services and viewed them as safe. Not aware or recognizing the risk that they were taking on. The yield had to come from somewhere. Nearly the entire lending industry became insolvent and there are rumors that Nexo might be next. While I’m a huge fan of trying to earn a passive income. Many of us got reminded of a hard lesson. The crypto industry is incredibly young and will go up greatly in value. Instead, those who are chasing yield are trying to pick up a few coins in front of an oncoming freight train.
Being Impatient With Your Crypto
This is a bad habit that I see people repeating time after time. They bought a coin that they liked and felt had great potential. However, suddenly a different project breaks out and soars in value. They become impatient and decide to sell your slower-moving crypto for the “hot project.” But soon after doing that the new coin either slows down or sees a price drop and the original coin they were holding suddenly begins pumping. Chasing pumps is something that most of us will always lose at. By the time you become aware of that project’s great price movement, it is already too late.
Making Many Small Purchases & Transfers
Upon first entering the crypto market I was obsessed at purchasing crypto anytime that I had free money. I would skip going to that restaurant and instead buy crypto. Sometimes multiple times a day. As soon as I purchased the Bitcoin or Ethereum I would instantly send it to my Ledger to keep it safe. All the while racking up purchase fees and gas fees.
At the time it only seems like a few cents here and there. A few dollars here and there. But the longer I was in crypto, the more I have seen prices of these projects increase. This also means that the once cheap sending fees I paid, have now become something substantial. Just checking how much I have spent on sending ETH, and swapping fees is something that leaves me with many regrets. Now worth thousands of dollars and this will only become worse as it continues to appreciate in value.
Always be careful to be mindful and fees.
Trying to Trade the Peak and Bottoms of the Market
A mistake that many of us make in this industry is believing that we are smarter than everyone else. That we are traders and can perfectly time the market. Selling our Bitcoin at the peak of the market, to rebuy near the bottom, which would allow us to significantly increase our portfolio size. However, most of us aren’t traders. Most of us will lose trying to do this.
Instead, most people will sell and see prices continue to sail past them. They will sell low and buy high. Most of us would just be better off having a long-term timeframe. Buying great crypto projects, and HODLing.
Listening & Trusting Influencers
Finally, the last crypto bad habit to avoid is listening and trusting influencers. The people who have gained a large following on YouTube, Twitter, or any other website should not be trusted. No matter what they say, they don’t have your best interests at heart. They often have ulterior motives of either you being their exit liquidity, or them being paid to shill junk coins.
Instead, always do your own research and make your own investment decisions. Don’t fall into the hype. Instead, invest in the great projects that will be around for the long term.
Avoiding these bad habits could make more of a difference in your future crypto success than you can imagine. I have made a few of these mistakes myself, but have learned from them and am motivated to do even better in the future.
How about you? What are your crypto bad habits?
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As always, thank you for reading!
