The longer you are in the cryptocurrency market, the more surprising things you will learn about yourself. Some are great, but others are not as much. For example, a trait that many people have learned about themselves in this market is that they are obsessive about collecting. There is something about the numbers, money, and collecting aspect of crypto that can quickly escalate into an addiction for many. All of that combined with the dream of hopefully being able to change their lives financially is enough to make this a trait that could destroy your life.
It begins by investing a responsible amount of money into the market. However, once you have gone down the rabbit hole your conviction in Bitcoin, Ethereum, and other crypto couldn’t be higher. You begin to believe that this is your can’t-miss lottery ticket. And that you need to put everything you possibly can into the market before that incredible opportunity disappears. Unfortunately, this causes many people to invest far more than they can afford in the market. Resulting in their entire financial fate depending on the performance of Bitcoin.
I believe that cryptocurrency will be the next big thing to take over the world, and we haven’t even had a glimpse of what its true potential will be. However, there is no denying that this market is a complete gamble. Even the safest bets in this space, Bitcoin and Ethereum, are some of the most volatile financial assets on Earther. Taking it a step further, smaller cap altcoins amplifies that risk by at least 100 times.
The longer that I have been in the cryptocurrency market, there is a common mistake that I see people continue to make. And it all comes down to that dangerous “collecting” aspect of crypto.
They begin to accumulate crypto tokens that have no chance of ever appreciating in value and have no real use case. Meme coins, tokens made by influencers, cash-grab forks, AI tokens, and the list goes on. These people will often have crypto portfolios that include over twenty cryptocurrencies, and often much more. Accumulating junk with the hope that someday it will go parabolic as we have seen with recent meme coins such as Dogecoin, Shiba Inu, and PEPE.
This is a phenomenon that seems to be exclusive to the cryptocurrency market. While there are penny stocks, no one invests in them as people invest and put their belief in junk cryptocurrencies.
I believe that one of the main reasons for this is that in crypto’s short history, prices of most coins have followed Bitcoin like a magnet. When Bitcoin goes up or down, all other coins follow suit. That isn’t how it works in the stock world. Eventually, the cryptocurrency market will mature and each token’s price will move on its own merit. That is the day when people who own these tokens will feel extreme pain.
In fact, the harsh reality is that these people will feel max pain before that market maturity even happens. While many people like to invest in altcoins because they feel they can appreciate much faster than Bitcoin. The truth is that over time, most coins trend to zero against Bitcoin. After their first full cycle, nearly all cryptocurrencies never reach a new all-time high when compared to Bitcoin or Ethereum.
I have found over the years that limiting the number of coins in my portfolio has dramatically increased my level of success. It has helped me eliminate projects that don’t have potential while allowing me to devote more of my time to being highly knowledgeable about a select few amount of projects. The cryptocurrency market is incredibly large and vast. If you try to own everything, you will fail. Instead, it is better to own the blue chips and projects that have the most potential.
How about you? How many cryptocurrencies are in your portfolio?
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