Crypto mistakes I made that you should avoid

I could have made better profits with less effort. Avoid these mistakes I made to get out more of your crypto assets.

Mistake #1: You are not really committed

Many years ago I bought my first bitcoin when it was about 800€. Some might say even this is late, but considering the current value that was a really good entry price. The technology was widely unknown and I was hesitant about the use and Bitcoin’s future. During a price drop, I freaked out and sold my stack at a little loss. I was not ready at all and left the crypto universe.

Later, Ethereum caught my attention and I got into crypto again. I bought a decent amount of ETH for 80€. Ethereum had several use cases which I could identify with and therefore I believed in its value, as the blockchain technology in combination with dApps offer endless possibilities.

If you find a trustworthy project you believe in, stay committed - even if the market dips. Despite bear cycles and price drops I never sold my Ethereum for fiat again. I did waste it for other coins though, which leads me to mistake #2.

Mistake #2: Buying coins with zero use for potential gains

During the recent years, thousands of new coins and tokens emerged. Many of them are great projects and are among the top 10 now. Most of them, however, were just scam in order to get your hardly earned money. I invested quite a bunch of my Ethereum stack in coins that never took off. Some very promising projects failed, but others were doomed from the beginning and I should have known better if i would have done my research.

Be honest to yourself: did you read all whitepapers of tokens you invested in? Did the project have an active community or support? Did you fully understand its functionality before investing?

Always take your time to learn more about a new coin, ask yourself if you really see a use case and understand the functionality before investing into potential scam.

Mistake #3: Jumping on the hype train (also known as FOMO)

If you ever watched a bull cycle in crypto, you know how it feels when crypto currencies surge hundreds or thousands percent in no time. It seems too easy and ridiculous, so that everyone wants to jump in and make profits, too. Although a coin might seem to rise endlessly, I highly recommend never buying in at an all-time-high. What comes up has to cool off again. History shows that there have always been attractive buy-in opportunities once the market has cooled off.

Mistake #4: Joining Pump and Dump groups

If you strive trough forum boards and telegram, you will most likely find groups advertising having “insider information” or guarantee a rise of certain coins. Sometimes you have to pay to enter these groups or provide some of your stack to participate.

During a pump and dump, all participants start buying a certain coin with low liquidity. The group admins orchestrate the process so that it looks like the coin has generic and healthy growth. The goal is to gain attraction of external investors who can be dumped on.

Keep off those groups! It always ends like this: either the admins disappear with your money or parts of the group become greedy and start dumping their stack on the group beforce the price target is reached.

Mistake #5: Trying to beat the market (aka swing trading)

Now that you only invest in real-value, sustainable and community-backed projects and stay off scammers, you might want to increase your stack without investing more fiat. Many users think that they can beat the market by selling high and buying back in low. You can try, but be warned:

Time in the market > timing in the market

99% of the people who try to beat the market by swing trading end up loosing a decent amount of their stack because of bad timing. It is extremely time consuming and stressful to watch the markets all day long in order to find good buy or sell opportunities just to find out that others outperformed you by just hodling.

If you want to invest in a project, buy more of your desired tokens during bear cycles.

Besides just buying and holding, you can also set up a savings plan where you buy a certain amount of your favorite currency every week or month. Using this method you can also take advantage of the cost average effect over a long period.

Mistake #6: Not making use of PoS-coins

Modern tokens and cryptocurrencies use the PoS (Proof of Stake) algorithm rather than PoW (Proof of Work). While Proof of Work uses computer power to calculate a block and validate the transaction, in PoS a certain participant is selected to create the next block. By providing your tokens (or delegating them to a pool) you can participate in this process and gain rewards.

Ethereum 2.0, CAKE, DFI and many more can be staked at rates between 4 and 90% per year. Be careful, however, which token you stake and which pool you use.

Final words

I hope these mistakes and advices help you to avoid common problems. I wish you all the best and good luck with your investments. If you have any additional advices or experiences, let us know in the comments.



Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store