The cryptocurrency market is a place where lives can be changed overnight. That is the reason many of us decided to enter this market. Perhaps you discovered the market, fell down the crypto rabbit hole, and did your research. Coming to the conclusion that not only could you make a lot of money in this market, but that it is the next big thing. That we are early adopters and a storm of change is about to come.
During this initial period of us entering the crypto market, we have heard countless stories of veterans sharing their mistakes. The decisions they made had a drastic impact on their portfolio. Not only costing them thousands of dollars but in many cases millions of dollars.
Those of us who are smart pay close attention to their warnings, not wanting to make the same mistakes. We feel that in some ways we are smarter than them. That we definitely won’t make the same mistakes.
However, there seems to be an inescapable fate for people in the cryptocurrency market. No matter how careful you are, or the decisions that you make, you are destined to experience large losses in the crypto market.
The most obvious example of this is trading with leverage. Bitcoin, Ethereum, and crypto are the most volatile financial assets that you can invest in. Amplifying that risk by using leverage is almost asking to be liquidated. As painful as losing everything can be, it's hard to feel sorry for people who lose their crypto by doing this.
However, there are ways that people experienced extreme losses in crypto by doing what they felt was a responsible thing. Many have attempted to take self-custody of their coins, only to lose their keys. Others decided that trading wasn’t for them, that they would take the much safer approach and send their Bitcoin to lending services like BlockFi or Celsius to earn a yield, also staking crypto such as UST. But as we all know, this was also a mistake that resulted in people either losing their crypto or having their funds frozen for an undetermined length of time.
Perhaps you were lucky and didn’t trade with leverage or use lending services. But there is one road that nearly everyone in crypto goes down eventually. Altcoins. When entering the crypto market most people begin by buying Bitcoin and Ethereum. Those are the two blue-chip assets in the market, that have proven the most, and will likely be around in ten years. However, most people look at the prices of these two assets and feel that they have missed the boat and that they can’t get rich by investing in them. Therefore they begin looking at smaller and riskier projects that haven’t taken off yet. Hoping to hit the lottery and make profits.
Some people get lucky, but we are not lucky all of the time. While a very select few projects may become popular in the future, the truth is that most of these projects will go to zero. When investing in meme coins, the chances are even worse. As people are in the crypto market longer, their greed and ego get the best of them. They feel that they are smarter than the market, and their eyes become blinded by dollar signs. Eventually, nearly everyone in the crypto market will experience a big loss sooner or later. The thing that will determine your success in crypto is by minimizing your losses, and how you react afterwords.
How about you? What were your big losses in crypto?
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