Here Is Why You Lose Money In Cryptocurrencies And How To Change That.😢😔😊
Do not get this wrong or twisted, this blog is not meant to stigmatize or spread fear on the risks of cryptocurrencies but to shed some light on some of the common reasons why people loose money in cryptocurrencies. We all probably know that this year and last year has been exponentially profitable for people in cryptocurrencies including newbies such as “Elon Mask” and investment companies such as micro-strategy, and as much as crypto is known for its profits, it does present avenues for loosing money. and many people always end up loosing their gains. We have highlighted why people loose money in Cryptocurrencies.
Little or No D.Y.O.R
As a newbie it might be tempting to rush and make some unplanned purchases in crypto due to fear of missing out. F.O.M.O. At this point you just want to be part of the heard and make some profits as everyone else is doing, without proper understanding of what the project you are investing in is all about and what its token economics looks like. Without proper education on what you are venturing in might lead to poor decisions which might lead to loss. i.e. many people rush to trade leveraged items without comprehending the risks there in or without understanding concepts of risk management.
Always make a point of understanding what cryptocurrencies are if you are new to the topic, do your own research on the investment tools you decide work with and when satisfied use one finger at a time to test the heat of the water.
Driven By Greed
This is more of a psychological dilemma, and we do know where there is money, greed is always around the corner. Very many people get into cryptocurrencies with the notion of making quick money, well this is true as we have seen exponential gains ranging from 1000% to 10,000% with some cryptocurrency based projects token. When you get to here about such returns, what happens? Yea right. As a newbie or normal investor if you do not know how to control your greed emotion, you will always end up making the wrong decisions, such as wrong entry and exit points on your investments. Alternatively greed could make you loose all your profits as you anticipate more gains. Greed is mostly stirred by fear of missing out ( F.O.M.O) and regret of missing out (R.O.M.O)
Always take your time before making any decision, to do your research, lias with people who experience in the space and if you feel that your are primarily driven by F.O.M.O or R.O.M.O it might be advisable to take a chill pill and. Avoid investing money you cannot afford to loose.
Victim Of Scams
Elon Mask recently tweeted that “Crypto and scammers should be put into one room”. What does this tell you about the space? To me it means that the crypto world presents everyone with opportunities of making revenue , some through legitimate ways and others through illegitimate ways. As you look to dive into crypto you have to know that scammers are always ahead and they know what many people think of crypto, so they build smart applications to lure people who are driven by greed, people who do not do their research and people who invest all their money. At the end of the day they smile and your cry and curse. Reason being a few things, you simply did not do what point one and two advised.
Always do your own research before getting into any investment avenues, search for reviews online and ask your crypto survey friends or relatives about such platforms. Don’t just make a decision, make sure you make a good one. If a platforms returns are too good that you feel like telling the entire world about it, you should probably think twice.
You have no strategy
The likes of the company Micro-strategy and Tesla have a plan of how and when will enter the cryptocurrency market and how and when to exit, do you? Many people always end up buying tokens or coins at their all time high prices and regret their decisions if the price retraces a little bit exiting on their positions and securing a loss. Others run to trade high risk features without a plan on when to enter and exit. Without a plan you will end up having poor entry and exit points, invest in the wrong tools , be subject to indecision and F.O.M.O.
You might be wondering what should I do? It all gets back to the same same points, conduct your research and have a plan on the category of assets you are getting into. i.e. De-Fi , exchange tokens, NFT tokens, Identify a list of projects under this category that have a dedicated team, good token economics, a product that makes sense, last but not list look at the price performance of their token and establish an appropriate entry and exit point. If ready execute your plan and always practice patience, remember Rome was never built in one day.
its important to understand why people loose money so as to avoid repeating the same mistakes, building wealth has never been a one day thing, and if you are lucky enough to have done so, without the right mentality, habits and plans you might end up loosing all of it. So stay open minded, do your research before investing, never invest what you cannot afford to loose, always be contented with your profits since it has never been a competition. One more last thing, at times short term price devaluation is the pain you have to endeavor for long term gains.
Have you lost money in crypto? share your experience and how you changed that.