Repeating the same thing over and over, expecting to get different results is the absolute definition of insanity. For those of us who lived through the last crypto cycle, we were lucky to survive it with our portfolio intact. However, there is no denying that we made plenty of mistakes. With the recent news of BlackRock officially applying for a spot Bitcoin ETF, the market has turned completely bullish. All of a sudden FOMO has returned to the market, and there is hope for the future.
With that said, if we don’t take a step back and learn from our previous errors, improving our methods and strategy, then we should expect to have the same failures.
Chasing Yields
Chasing yields on our crypto; the trap that got a large percentage of the cryptocurrency market. The temptation of easily putting your Bitcoin and other coins on services such as BlockFi, Celsius, Haru, Voyager, FTX, and Hodlnaut was too enticing for many to pass up. But then last year's summer of insolvencies came causing funds to be locked on their services with no guarantee that people will ever see any of their coins again. It was a harsh reminder of “not your keys, not your crypto.”
Many experts are predicting that Bitcoin, Ethereum, and crypto will cause one of the largest transfers of wealth that the world has ever seen. With an asset that already has incredible potential to continue appreciating, there was no need to seek out ways to earn an extra yield on those assets.
As we head into the next bull run, we must always remember that the most important thing isn’t actually making huge profits, but actually keeping your portfolio. Learn how to take self-custody, and do it before your portfolio is worth a fortune.
FOMOing Into Projects
One of the worst things you can do is FOMO into purchases. The cryptocurrency market is especially dangerous in this regard. It is open 24/7/365. All it takes is a few seconds of weakness and you could have already spent all of your free cash.
The hype of the bull run isn’t something to underestimate. People get carried away with projects seemingly always going up on a daily basis. Things will be different this time and there won’t be a market crash in the future. That projects like Baby Dodge or PEPE are the next big things.
The truth is that when the market is FOMOing into a certain project that has gone parabolic. That almost always means the short-term top has been reached. Your crypto position should always be built during the bear market while continuing to dollar cost average through the bull market. Bull markets are the time to sit back and enjoy the hard work that you put in during the bear cycle.
It’s Okay to Take Profits
In the cryptocurrency market, we get so caught up in prices going to the moon. That if we want to be successful, we need to HODL for tens of years. There often is a stigma against selling or taking profits on your coins.
The thing that you always need to remember is that if you can change your life for the better by selling, there is absolutely no shame in doing so. Just ask anyone who has their funds locked up on lending services that became insolvent. While they all wished they would have taken self-custody instead of lending out their coins, a large percentage of them probably wish they would have taken profits as well.
Life is difficult, if you can make it better or less stressful for yourself; do it.
While we can try to learn from our previous mistakes, it is a certainty that we will continue to make even more. The hope is that we will continue to improve our skills and knowledge so that our mistakes aren’t death blows to our portfolio.
How about you? What crypto mistakes are you hoping to avoid next cycle?
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