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When the crypto space deals you a bad hand

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Written by   179
1 month ago

The past weeks have been devastating for some new entrants into the world of crypto trading and investing . Even some not so new entrants got hit as well. Sadly some will never get the opportunity to learn from their mistakes as they opted for suicide. This is quite unfortunate and honestly wasn't the best way to have reacted to their loss irrespective of the magnitude. There's a common saying that when there's life, there's hope.

We never truly know how strong or resilient we are or can be until a strong adversity stares us in the face due to our actions or inactions . This goes without saying that being able to rebuild or pull oneself together after an unexpected financial loss or investment failure is one of the most difficult challenges anyone can encounter in life.

It's like going from grace to grass and having to strive to move one more time from grass to grace. This by any standards is no easy feat as it requires a strong will, courage and determination to pull it off. In fact, for some the thought of losing it all again takes the wind out of their sails to face the daunting task of rising from the fall.

The recent happenings of the depegging of prominent stable coins with that of UST stealing the spotlight due to the magnitude of losses of investors have once again energised the critics of cryptocurrencies to ramp up their onslaught. In fact , some have generalised the entire crypto space as one big Ponzi scheme, where the big fish or whales always win. Sadly some scams which have been pulled off in the crypto space seem to justify this assertion. These critics have even suggested that the UST crash could have been deliberate.

The concept of decentralisation too hasn't been spared by these antagonists as they argue that any system without any sort of regulation is always bound to collapse or implode. Furthermore they argue that the high rate of scams and hacks in the cryptospace particularly that of decentralised finance is proof that the absence of regulation or oversight creates an environment or system that allows criminality to thrive.

With all these market crashes and investors losing entire portfolios, we may see a shift in public sentiment in favour of regulation playing a more prominent role in the crypto space especially as it is being marketed as a viable means of keeping market crashes at bay in some circles.

However going forward irrespective of if regulation becomes more integrated or not, we all need to be reminded that the crypto market remains a volatile one. This reminder is especially important when onboarding people to crypto investing or trading, letting them know that it's not always rosy. Price fluctuations which affect the value of invested funds will always occur. Therefore individuals need to put appropriate risk management protocols in place to protect their investment or portfolios.

NEVER invest funds intended for important stuff in your life like tuition, mortgage or worse still entire life savings in any crypto asset. That is a big NO NO.

ONLY invest what you can afford to part with in the event that the investment fails or doesn't perform as expected. This can happen even outside the crypto space. A business activity can look so promising with those managing it doing everything right and still fail. That is life. Sometimes bad things happen despite our best efforts.

The reasons why some persons after the UST crash might have opted for suicide is that they went all in with funds that they shouldn't have risked investing in the first place. Hence just when they thought they were home and dry with their investment decision, the UST bubble bust. The rest is now history which we all should learn from even those who weren't affected directly.

Another fundamental advise is always make educated or informed investment choices to minimise the risk factor involved in your investments. This is only possible if you always do your research. Do not rush into any investment simply because of the perks it is hyped to offer else you may get burnt before you know it.

Invest ONLY in assets that don't just have strong fundamentals but also have potential use case scenarios or utility. This is why assets such as Bitcoin cash are which have proven themselves as usable payment solutions are good investments.

While those who do not have a favourable disposition to cryptocurrency have touted the current market crisis as the beginning of the end or an apocalypse of sorts for cryptocurrency. However, those who see a promising future liken the current situation to that of the internet as at the year 2000 which a newspaper article captured as probably being a 'passing fad' as millions of people gave up on it. But here we are today, with the internet continuing to break new boundaries. Hence for crypto enthusiasts, the belief is that:

"this too shall pass"

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