The habits you form will determine the success you have. Growing up we were all taught habits that were thought to help people become more successful. Whether it was waking up early each day, eating healthy and exercising, reading books to keep the mind fresh, saving your money for a rainy day, and the list goes on. However, those are all great habits that will help you in life. Today we will be discussing the bad habits in crypto that will keep you poor. While good habits can bring you unbelievable riches in this market. Bad habits can destroy your portfolio.
At one point or another, we have all likely made some of these mistakes, and hopefully, we learned from them quickly enough that they didn’t become habits.
1. FOMO and Impulse Buying
The crypto market is full of people who are wanting to change their lives financially and sometimes that can be our biggest weakness. This sometimes causes us to follow trends even if they aren’t in our best interest. We have researched endlessly to build our portfolios but can sometimes become impatient when we aren’t seeing the value of it increase as fast as we’d like. Then all of a sudden a coin that we had no interest in suddenly begins pumping out of nowhere. We quickly sell off the coin we originally liked for the new hyped crypto, only to learn it has already finished its upwards trajectory. This new crypto’s value soon begins dropping, and then our original coin begins increasing. You will almost always look when chasing pumps. When you see the pump, it is usually already finished.
2. Buying Daily & Not Paying Attention to Fees
One of the most popular crypto investing strategies is dollar-cost-averaging. By buying on a regular basis, users will be able to obtain a nice medium-buying price. Taking advantage of the daily ups and downs of the crypto’s price movement. Some people buy monthly, weekly, and sometimes even daily. People who have dollar-cost-averaged over the long haul have been great winners and it is a strategy that I would highly recommend. However, if you’re not paying attention this can be a strategy that causes you to lose a lot of money.
The main reason for that is fees. While there are some exceptions on some exchanges or with subscription services. Each time you buy crypto, you will be charged a fee. Usually, the fee is a higher percentage for lower cash-value purchases. This means that if you made a small purchase every day of the month. You would be charged higher fees than if you had made 1 or 2 larger purchases per month.
3. Not Taking Self-Custody
This is a bad habit that will often be completely forgotten and sneak up on you when it is the most important. If you have a significant crypto portfolio there is no reason why you should be taking the risk of keeping it on crypto exchanges. Too many people learned this the hard way last year during the summer of insolvencies. I personally know many people who had hundreds of thousands of dollars frozen or locked on exchanges and 3rd party services.
4. Not Taking Advantage of Staking Opportunities
While taking self-custody is important; it is just as important to make use of your crypto. One of the best ways to do that is through staking. Since staking is baked into the actual protocol, this also means it is much safer than lending through 3rd party services.
With staking your crypto you can often earn 5%-10% on some of the biggest projects such as Ethereum, Cardano, Polkadot and the list goes on. While 5% each year may not seem like much. During the bull run when crypto prices appreciate; suddenly that 5% will have become something much bigger. The people who are rich already know that the best way to do that is by making their money work for them. I have seen countless people who have invested in crypto but didn’t even know that they could stake to earn a passive income. We need to use every tool available in order to turn our lives around.
5. Using High-Leverage
The longer I have been in the crypto market, there have been many disturbing trends that I have begun to notice. One of these trends is that many people who are new to crypto believe that they can become great traders. They use money that they can’t afford to lose and use too much leverage. They are setting themselves up for failure.
The fatal flaw in the cryptocurrency industry is ignoring the risk and having too much confidence in our abilities. While some people can find success trading. The truth is that 99% of us will fail at trading and we need to recognize it. If we want to build wealth that lasts, the best option is to do it slowly. Using high leverage puts you on a fast track to losing everything.
6. Listening to Influencers & Not Doing Your Own Research
If there is one thing that you need to know in crypto it is that you should never build your opinion on what influencers say. They have their own thoughts, opinion, and possible ulterior motives. Often times influencers on YouTube or Twitter have been paid to shill projects, only to use you as their exit liquidity and dump their coins on you. You shouldn’t make your opinion based on what any of them says, and that includes me as well. I openly admit that I am biased towards Bitcoin. You need to learn how to research projects and decide what to invest in. After all, you work so hard to earn your money. Why wouldn’t you devote an equal amount of effort to invest it?
While these tips won’t make you rich. They could prevent you from forming bad habits that WILL prevent you from becoming rich in the future.
How about you? What are your bad crypto habits?
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