Avoiding These Bitcoin Mistakes Will Change Your Life
If you don't know what you're doing, this market will eat you up and spit you out long before you will ever see any profits. The bitcoin and cryptocurrency markets are some of the most volatile that you will ever come across. After all, in just a few months, bitcoin has dropped by over 50%, and other altcoins have dropped upwards of 70%. Yes, the markets are incredibly risky and you need to have come to peace with the fact that any money that you invested into these markets could be lost. With as risky and dangerous as these markets are, you might be surprised to learn that the biggest threat to your success is actually yourself.
Unfortunately that is true. In the cryptocurrency investing markets, most people are their own enemies. Buying tops and selling bottoms. Investing into the wrong coins and projects. Getting their advice from the wrong source. Not knowing how to have their own conviction or doing their own research. Not having an investing strategy. And finally getting so burnt out of the markets from deep price dips that they miss the greatest buying opportunities. These are all easy to make mistakes that many people succumb to. But knowing how to avoid these is what can be the difference from you not being successful, to being very successful. Let's talk about how you can avoid these issues.
Buying Tops and Selling Bottoms.
The first thing that you need to know is that it is incredibly hard and most likely impossible to correctly time the market bottoms. You need to constantly be aware of this fact. This is why dollar-cost-averaging is so important. Yes you will have been buying when the price was over $60k. But that same price averaging would have you buying now at $29k. It all evens out to give you the best buying price average over a duration of time. What this includes is every time that you get get paid from your job, be it weekly, bi-weekly or monthly, to simply put a tax on yourself and always buy bitcoin no matter what the price is. Like I mentioned above, this will help you get a great average buying price, but it will also make your life a lot less stressful. Relieving you of the stress of trying to get the best buying price. But, there is one more tactic that can help you become even more successful during these price dip days of panic. You need to keep cash on the side. This is along with your dollar cost averaging. This extra cash on the side will help you take advantage of the price dips even more. It is famous way of thinking, but it is true; it is these very large price dip days that fortunes are made.
Investing into the Wrong Coins and Projects
You need to be fully aware of the quality of the coins that you are investing into. If you are putting money into a MEME coin, you need should view that exactly the same as buying a lottery ticket. There is an incredibly high change that these coins will go to zero. Instead , you need to know the market, and know the projects that you are putting cash into. You work so hard for you money, why wouldn't you put the same effort into learning about things to invest that hard earned money into. I prefer bitcoin. Bitcoin has the longest tried and true track-record in cryptocurrency. It's been here the longest, and out of all the coins out there, it is the most likely to be around 30 years from now. Can you say the same about the MEME coins?
Getting Advice from the Wrong Source
This is something that really irritates me, and it is people getting their cryptocurrency advice from the wrong people or type of source. All you need to do is to go watch some videos on YouTube from "influencers" who are clearly crypto degenerates, or shilling coins that they are sure to have the chance to do a 100x soon. What many people aren't aware of is that these influencers are being paid thousands and thousands of dollars to promote these coins that they talk about on their show. Many times they are paid in the coin that they're promoting. Their audience is large enough that it will help pump that said coin, and then they dump it. Causing their audience to lose money. Just go look at the comments of some of these videos. People are ready to blindly follow whatever the YouTuber says, and are begging for the next crypto gem to put their money into. Whenever I see these type of people, the pure lack of knowledge or personal responsibility really gets to me.
This leads me to my next point
Not Knowing How to have their Own Conviction or Doing their own Research.
Like I just mentioned above, the people who are begging others to show them the next up and coming coin will never make it in this market or any investing market in general. If you have to beg for market winners, or don't even really know the project that you are investing into, you shouldn't be putting money into it. Like I said before. You worked so hard to get your money, you need to put the same level of effort into investing it. People trying to get rich quickly will very soon be parted from their money. Instead, you need to have your own conviction. Basically this means forming your own opinion and sticking to it. Once I truly went down the bitcoin rabbit hole and learned more and more about it. I learned what makes it so great, the use case it has, and how it will change the world. Throughout the many price dip times, I have never forgotten why I put money into it. And you need to be the same. You also need to learn how to do your own research. You should never put all of your faith and trust into one person or source. I like to use a collection of several sources to not take their advice, but to always be learning. Then I go through the information, and form my own opinions and decisions.
Not Having an Investing Strategy.
You need to know why you are in bitcoin and cryptocurrency in the first place. If it is to get rich quickly, than you might want to re-think entering this market. It is often those people who wanted to get rich quickly that will sell at a loss during the large price dip days. Instead, you need to keep the conviction that you learned to have above, and ride through the difficult days and even use the cash you set aside to accumulate even more. For some people their strategy will be to invest only into bitcoin, for other it might be ethereum. There will be some that are most interested into DeFi, or forming their own passive income. Whatever you decide is your strategy, you need to stick to the plan to make that dream a reality. Anything is possible, but you need to remain patient. I have found that having patience and being able to hold onto your portfolio even during the difficult days is what separates the newbies from the successful investors. For me, my strategy is easy. I invest almost everything into bitcoin and then a little percentage into ethereum. My goal is to grow my passive income into a significant amount by lending out the bitcoin and ethereum and also staking it. I view bitcoin as the alpha asset and the asset that you need to have. Ethereum is a blue-chip that has a lot of potential and will perform very nice in the future. Everything else's future isn't guaranteed. The cryptocurrency market is already risky enough, I prefer investing into the blue-chips.
Avoid Burn Out
Let's face it. The constant weeks and months of price drops can get to the best of us. It can take such a too that it may cause you to take a break from the market, dislike it, or sell your entire portfolio all together. Always remember that what you invest into this market could be lost, and if you accept that fact, your life in cryptocurrency will be less stressful. Don't be the person that panics and sells at the bottom. Even if you don't sell, but instead just take a break from the market; this can be enough to hurt your chances at being successful as well. Personally, I have done a good job using my bitcoin and ethereum to earn a passive income to help me accumulate much more of each. But the method that made me the most successful and help to make my portfolio what it is today was taking advantage of the price dip opportunity. In March of 2020 when the price of Bitcoin went to $3,000; that ended up being the time that I was able to accumulate most of my bitcoin. It completely changed my investing future, and quite possibly changed my life forever too. If you are taking a break during these times, you will likely be missing out on life-changing opportunities.
As for me, sometimes the days of constant FUD will get to me. But I always go back to my strategy and why I'm in this market. I then think back to March 2020 and how that shaped my financial destiny. With bitcoin and cryptocurrency, we are offered amazing opportunities every once in a while. You just have to be ready to pounce and take advantage of those times. Right now is one of those amazing opportunities. Don't miss it.
How about you? Have you been taking advantage of this amazing bitcoin opportunity? Have you made any of the mistakes that I listed above?
Thanks for reading
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