The Five Dumbest Mistakes Made by Crypto Investors

Let’s discuss the five dumbest mistakes crypto investors make. How are you doing, crypto degens? I’m doing great this afternoon. It’s good to see you all. We’ll start with number one on our list, moving from the least dumb to the most dumb mistake: chasing pumps. Everyone in crypto chases pumps, but it’s not usually a great idea. If you do chase pumps, never take money from a good project to invest in one that’s pumping. Never do that.

For example, I sold BNB, a very good coin that’s been around for a long time and is seeing lots of adoption. I sold it to buy STAX, which is meant for building on Bitcoin—a terrible idea since Bitcoin is digital gold and shouldn’t be used for building. I bought STAX when it was pumping, thinking it was a good move. But then BNB, which I knew was a great project, continued to rise. I learned that chasing pumps can be a mistake, especially when you take money out of solid projects like BNB.

Sometimes, you might get lucky when something is pumping from a very low position and it continues to rise. If you decide to chase a pump, use new money and don’t risk too much unless you can afford it. For instance, I bought Asteroid Sheibba, a meme coin, after it had already pumped significantly. I put in a little money, and it pumped more, giving me a 7x return. I sold it and made a good profit. But remember, don’t take money out of good projects for these risky bets.

Another example is Phantom, which rose quickly in 2021. I bought some after it dipped and then saw it shoot up again. However, I made mistakes by selling good projects like BNB out of impatience. In a bull market, everything rotates, so wait for the rotation to hit your coin instead of jumping into something that’s pumping.

Buying Dumb Things and Holding Them When the Market is Hot

The second dumbest mistake is buying dumb things and holding them when the market is hot. If you buy something dumb, sell it right away. In hot markets, people buy dumb things like NFTs. In 2021, people paid millions for NFTs like Bored Ape Yacht Club. Now, those are worth much less. I didn’t buy any because I’m not rich, but I did make other stupid decisions.

In 2021, everything was going up, and I thought I was smart. I bought horses in the Pegaxy game, spending over a thousand dollars each. Initially, I made $50 a day, but the value crashed to zero within a month. I also bought land in a game, which also went to zero. These were Ponzi schemes. Buying dumb things and holding them during bull markets is a very dumb mistake.

Not Selling When You’re Way Up and Giving Profits Back to the Market

The third mistake is not selling when you’re way up, leading to round-tripping your profits. Almost everyone does this. If you’re in good projects like Bitcoin, you can round-trip if you’re patient. But most people don’t sell when they’re way up. For example, I bought Solana at around $20, and it shot up to about $260. I didn’t sell, and it crashed down to $8. I started buying again when it was cheap, but I round-tripped my gains.

If you really believe in a coin long-term, you can hold it or sell part of it. But if you sell and make a profit, you’ve won. Never selling means you’ll never make a profit. For instance, I sold Asteroid Sheibba at a 7x profit. It went higher later, but I still made my profit and got out.

Buying Old Coins in the Bear Market Thinking They Are Cheap

The fourth mistake is buying old coins in the bear market, thinking they are cheap. While there are exceptions, generally, you shouldn’t buy old coins after they’ve declined significantly. When a new cycle starts, new coins emerge, and old ones often don’t recover.

For example, I bought Sonic, thinking it was a bargain during the bear market. But Sonic, which is Phantom, hasn’t come back. It was once over $3 and is now at 4 cents. I held onto it for a long time before finally selling. Similarly, Gala went crazy during the metaverse hype but crashed afterward. I started buying it, thinking it was cheap, but it didn’t perform as expected.

Understanding Market Cycles and Investment Conviction

The narrative hasn’t returned, and while it might come back slightly, it won’t be the same as before. You can’t base your purchases on past events, thinking that just because something surged in the past, it will happen again. It’s likely that a different coin will experience a surge, and predicting which one is challenging. This brings me to the final point: not buying when prices are low during a bear market. People often lose hope and quit, thinking crypto is over and that there will never be another altcoin run. They believe it’s only about Bitcoin now. However, when prices are low, that’s when opportunities arise. Giving up means missing out on potential gains.

Consider those who bought Bitcoin when it was worth almost nothing and held onto it until it reached the $100,000 range. They had to believe in its future value to hold on, rather than selling for a modest profit at $20, $100, $300, or $1,000. This requires serious conviction. Similarly, during a bear market, you need to have strong belief that crypto will rebound if you want to profit. Jumping from trend to trend, like abandoning crypto for AI, won’t lead to success. You need to stick with something to win.

Current Opportunities in the Crypto Market

Right now, there are excellent projects available at very low prices. I’m not referring to coins like Gala or Sonic, but rather some of the top coins. If we look at Coin Gecko’s top coins, we see significant tokenization of real-world assets. Everything is moving on-chain, with Ethereum, XRP, BNB, Solana, and others leading the way. Chainlink is crucial as it connects everything, and Stellar, once thought to be obsolete, is also seeing a lot of tokenization. Toncoin remains important for Telegram payments, while Avalanche and HBAR are gaining traction. Although Sooie has potential, it’s not as prominent.

Banks and financial institutions are now using stablecoins and Chainlink to connect offline data to the blockchain. Chainlink is incredibly affordable and represents a great project at a great price. The major coins like BNB, Solana, and Ethereum are being utilized by companies like Mastercard, Visa, and Western Union for payments, generating fees for Solana through these transfers.

Institutional Adoption and Future Prospects

Financial institutions and banks are increasingly adopting crypto, and we now have numerous ETFs for Bitcoin, Ethereum, XRP, Solana, and others. These coins are unlikely to disappear and are expected to appreciate significantly in the future. Despite claims that crypto is dead and AI is the new focus, crypto is far from dead. Prices are currently very low, presenting a unique opportunity.

The biggest mistake is not buying when prices are cheap and losing conviction. That’s the most foolish move. So, that’s it for today. I hope you have a great evening and enjoy your life and family.