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Lessons Learned In 2021: Avoid These 3 Investing Mistakes To Avoid Possible Huge Losses In Crypto.
The year 2021 was probably one of the greatest year for the crypto market as we have seen enormous growth and adoption throughout the the year. NFTs, DeFi, blockchain gaming are just some of the categories that has shown its potential and will probably continue to grow during 2022.
But on the side of huge possibilities for huge profits, it's undeniable that there also lies an experience for huge losses for every people or investors that they have just took it as a lesson and hoping to do better next time, especially this year of 2022. So in this article, I'll be one example of those people who had huge losses in crypto and will share that bad experiences to everyone who reads this to be wiser than me in crypto.
When you look at any influencer's post of bragging their huge gains of money from investing, you will probably get hyped up and jumped into the field without knowing the possible risk you are taking.
Yes you can gain huge money with degen trading or investing in meme projects but you should also consider the risk of losing huge amount of money from especially if you are careless and only one-sided (just always looking for profits).
There are lots of perks when jumping in someone's call like you can probably be in good hands in following their buys, however, you should know that when you lose money in your investments, it will never be someone's responsibility. Your money, your responsibility. Don't go rant to anybody when you lose money following somebody's call.
When I stared investing huge amount from my pocket, I just blindly pick a coins or token that were prone to inflation - or tokens that have unlimited supply.
During the bull market, it was on the 3rd quarter of 2021, I randomly pick DeFi tokens like $CAKE and put huge percentage of my portfolio and stake it on Pancakeswap to earn more $CAKE tokens. I really thought it was a good investment especially that we were in the bull market. I didn't know back then that it was one of my bad decisions because time came that the market dropped so hard, $CAKE's inflation risen so much and I ended losing so much money. Many $CAKE tokens were minted and sold continuosly that made $CAKE drop to currently around $7 from an all-time high of nearly $50.
Another good example for inflationary token is $SLP -the reward token of Axie Infinity game. No matter how great the growth of Axie Infinity's user base is, it also meant the enormous growth of $SLP because billions of supply have been minted by players and the burning mechanism or other use cases for $SLP is way lesser than the demands from players. Players will just continuosly sell the minted tokens, especially that the market is currently bad for crypto, and it will be like until good fundamentals will be added for $SLP and Axie Infinity. The price will just keep on going down while the supply will keep on increasing.
If you are just new in crypto and investing, you might get hyped by anyone by the huge gains by showing it in any social medias and will likely think that crypto investing is just all about easy money, but don't get caught up with that.
Those people is likely experienced, knows how to find gems, knows how to deal with losses and profits and undeniably a risk-taker. If you don't know these things, then don't blindly go and just take the risk.
As a new one in cryptocurrency, it is very recommendable to learn first in crypto, make sure you only use the extra money and lastly, be a long term investor. It will really be recommendable to invest in crypto that's in the top 100 in crypto rank like Bitcoin, Ethereum, BNB and Bitcoin Cash. In that way, a possible loss of money more lesser than degen trading, finding crypto gems or following someone's trading calls.
Cryptocurrency is not just all about profits, when investing, you should also lean and consider possible losses along the way. But before you take any possible risks in crypto, make sure that you have brought enough knowledge, strong heart and make sure to understand and love the space.
And if you lost now, get up and try it again. It's not everyday that it will be a bad day for you. Get up, learn and win.