The Crypto Investing Dilemma

By johnwege | johnwege | 20 Nov 2023

When it comes to investing in the cryptocurrency market, there is a dilemma that we all eventually face. We have all seen the stories of how people have become rich in a short time, or even overnight in this market. It’s a place where dreams can come true, and lives are changed forever. During the bull market, there will be weeks where each day you wake up your portfolio will be up tens of percent. It is a market that can be so exciting, that it begins to consume you.

This is the where problem for most people begins.

We enter the crypto market aware of how risky it is and are initially very skeptical of it. For this reason, we start by only investing a small percentage of our wealth. 

But, as time goes by we continue to go down the rabbit hole of crypto and our conviction in this asset class grows even stronger. We begin to strongly believe that we know the direction that this market is heading toward and that we’re still very early. That it is a once-in-a-lifetime investing opportunity. 

And then the bull market begins. Seeing the value of our portfolio increase and also receiving the validation that our thesis was correct makes our beliefs in this market even stronger. We begin believing that Bitcoin, Ethereum, and crypto are the future and that it's nearly impossible that they will fail. We begin investing more and more of our net worth into the crypto market.


One of the golden rules of investing is to always keep a diversified portfolio. If you are investing in a market as risky as cryptocurrency, it would be highly recommended to invest in other conservative assets to balance out your portfolio. Things such as real estate or the S&P 500. 

However, this is when we have arrived at potentially the most dangerous junction of your cryptocurrency investing journey. Once you have been investing in crypto for a long time, you typically will have seen your portfolio appreciate by hundreds of percent. Days, where prices go up or down by 10% is just another Tuesday. You become accustomed to the risk and volatility. You might even begin to look at other assets such as stocks as extremely boring and a waste of your time. 

After all, why would you invest in a stock where you’d be lucky to see it appreciate 10% in a year when you could just buy crypto that could potentially appreciate much more?

There is no denying that there is much more upside to cryptocurrency. But, a successful investor knows the most important thing isn’t the paper gains that you make, but the gains that you are able to hold onto. Building a portfolio that will be successful for the long haul. This is why it is important to keep a balanced portfolio. Especially the older you become.

The cryptocurrency market is a place where your weaknesses will be shown to you. Getting carried away in the potential of the market, and forgetting to keep a balanced portfolio might work out for a little while. However, eventually, that good luck eventually comes to an end for everyone.

How about you? Do you keep a balanced portfolio of crypto and other assets?

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