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The Best and Worst Decisions I've Made in Crypto The Last 2 Years
In just a blink of an eye, the crypto markets have begun to become bullish again. And how great it feels. After months of what seems like constant downwards movement, causing many to lose hope, we must enjoy the moments when our portfolios see some relief. With Bitcoin passing over $22k, and ethereum approaching $1,500, some people are declaring that the price bottoms have been set, and that the bear market is over. Who knows if that is the case. From here on out, prices could continue to recover upwards, or we could dip back lower again. No one truly knows what will happen. However, it does feel that the mood in the market has begun to shift. Perhaps that is due to the ethereum developers announcing their target date for the ethereum merge to take place. Or it could be that prices reached levels that no one was willing to sell anymore at. Whatever the reason may be, times like these are great to look back at what we personally did well during the recent bull and bear seasons. With crypto, it is truly a market were you are bound to make many mistakes, that will humble you. There will also be times that you make great decisions that could change your life forever.
So let's talk about the things I did well during the recent bull and bear cycles. For timing references, this will be from 2020 until present day.
1) Taking Advantage of Huge Price Dips
It may sound incredibly simple, but buying during times when prices of bitcoin and other crypto had dropped more than 50% were some of the best decisions I've ever made. It is the greatest factor that I attribute to changing my portfolio from something quite average, to building it into something that could possibly allow me to retire in the future. The greatest of these moments was during the March 2020 price crash when Covid was first breaking out. Bitcoin dropped to just above $3,000, ethereum to $80 and the list goes on. I took a huge risk, but threw all my cash into the market at the time, and so far it has turned out very well. I would continue to take advantage of price dips, during the summer of 2021 and also these last few months we have been experiencing. While, the Bitcoin that I was buying during the summer of 2021 is technically in the red, I'm still very thankful I did it. The name of the game is to accumulate as much bitcoin and ethereum as possible. Buying during these times allowed me to accumulate much faster. With me having a long-term timeframe, I'm not really concerned with being in profits on a day to day basis.
2) Avoiding Meme Coins
In what seems like forever ago now, there was a time during the bull market that meme coins were the most hyped way to make money in the market. It is true that I definitely could have made a lot of money if I had invested in and traded some of those coins. But looking at them now, most of them have gone nearly to zero and likely will never recover. I am not a trader, and I like to invest in the project that I really believe in, even if that means that I'm leaving money on the table. Investing into crypto is risky enough, why amplify that risk even more?
3) Never Taking My Foot off the Gas Pedal
Before 2020 began, I made a personal goal to never stop accumulating, to essentially never take my foot off of the gas pedal. During my previous cycles, I had sometimes let my emotions get the best of me, and this resulted in me not accumulating as much as I could have if I had kept my full conviction. Over the years I have put in more hours of research than I would like to admit, and feel I know where the future prices of bitcoin and ethereum will be heading towards. Therefore, it doesn't really matter if bitcoin is $20k, or $70k. When it is over $500k, both of those previous prices will look incredibly cheap. The same goes for ethereum. When it eventually reaches the long fabled price of $40k. It won't matter if you bought at $2k, or $4k. Both will seem cheap. Buying lower of course allows you to accumulate more, which is the end goal. Dollar cost averaging has been an indispensable strategy that I would recommend to nearly everyone out there. The one, two punch of always dollar cost averaging, and then taking advantage of huge dips will almost guarantee success in this market.
4) Building Alternative Income Streams
When I first got into crypto, I had very little extra cash in my budget to invest in crypto. The worst feeling in the world is to know how to get rich, but just not having the capital to make it happen. And so I decided I needed to find other ways to make that happen. I ventured into things such as staking, blogging, and lending out crypto to earn a passive income. When I first began, the earnings that I was making was quite small. But compounding interest and the prices of coins also increasing worked magic, and I quickly began to see progress. The key is having persistent and also having patience. Success will not happen overnight, but if you keep at it, and do it for long enough, eventually success will come your way. If I can do it, definitely anyone can. But please be aware that the lending market is a mess right now, and should be avoided.
As did many other people, I was intrigued by the high interest that the stablecoin UST was paying out to users. Nearly 20%. And I would eventually lose some money here as it became unpegged. The interesting thing is that I never trusted UST, and was highly skeptical of it during most of its existence. I always had a bad feeling about it, but as time went on, I felt like I was missing out on easy profits. The idea is that I would keep a portion of my cash in UST, allow it to appreciate in value and then have that money ready to take advantage of price dips for bitcoin. I only got into UST literally a month before the de-pegging event occurred and began investing in it slowly. While I did lose some money, I am thankful that it was only a little, and taught me a very good lesson.
2) Becoming Reckless with Coins
And finally we come to my last point. I was a bit too reckless with a portion of my crypto by putting it on lending services like Celsius and BlockFi. Although making a passive income was also one of the best things I did. Thankfully I paid incredibly close attention to the crypto market, and also these companies. At the first hint of FUD or financial troubles, I quickly withdrew all of my funds from these services and therefore don't have any funds locked up on them. Something that I'm incredibly thankful about. But it could have very easily gone the other way. Which has led me to really think hard about lending out crypto in the future. It was something that I was a big supporter of during recent years, and one of the key factors that has allowed me to accumulate more. But, it is also risky. There is a famous phrase, that people are trying to pick up pennies in front of a freight train. Perhaps that what lending out crypto is, at least in its current form. And so I have decided to become much more carefully about lending out bitcoin, and it may take time for me to ever consider doing it again. Trust has to be regained in this market.
And so there you have it. You win some and you lose some. Overall, I am very happy with the decisions that I have made over the last few years, but things could have gone even better. They also could have gone worse. The key point is that I want to remember all of these things, the good and bad. And then learn from each of them. Making mistakes can be the best thing that ever happened to you, if you learn from them. However, if you make mistakes and never learn from them. Nothing good will ever come of them.
So how about you? What were your good and bad decisions that you've made in bitcoin and crypto during the last two years?