Making money in the cryptocurrency space can be a tricky thing to do as there are a lot of moving parts and things to consider. The process may leave some investors frustrated at their inability to turn a profit and leave the sector altogether.
Here are the Top 5 Reasons Why the Average Person Doesn’t Make Money in Crypto. Hopefully, these entries will help you remedy any issues you may have.
Obsessed with Buying the Dip
As crypto investors, we’re all aware of just how volatile cryptocurrency from the astronomical highs to the crashing lows. As such, many investors are on the lookout for the next big dip to scoop up more assets, but that attitude can quickly turn into an obsession for something that never comes.
Shout out to all the chumps who panic sold $DOT today. You’re already buying back higher ☠️
— hafagonia 🟣 (@hafagoniatrades) September 13, 2021
The fact is that no one reliably predict when and where a dip will occur or by how much it will go down. Back in July of this year, Bitcoin went down to around $30,000 a coin for a few weeks, but some still wouldn’t buy thinking it could go down lower and lose an opportunity.
I’ve written several guides for crypto-wallets here before, and in every single one, I specifically mention the security options each wallet has; be it the seed phrase or the ability to lock the wallet after a set amount of time. While many do, others don’t bother securing their assets.
Common mistakes I hear from people daily:
1. Trading leveraged products and losing, then digging bigger holes for themselves. 📉
2. Not backing up their wallets / losing seed phrase 📝
3. Not truly focused on their goals in life. 👁️👁️
— Zatoshi ✪ (@iamZatoshi) April 15, 2021
Understand there any many bad actors out there waiting for the opportune moment to find some insecure wallet and take everything inside. Or worst of all, some people lose their seed phrase and lose all access forever.
There are many altcoins and meme coins out there that have the potential to become an appreciating asset, but it’s important to do some homework and look into them. There are a ton of bad actors ready to take advantage of people who don’t have any better, or at the very least, biased hacks shilling their crypto.
As an example, look at the YouTuber TechLead. He recently created a cryptocurrency known as Million Token that he claims will be the next big thing. If you do research on Million, you’ll quickly realize that the whole thing is a scam and absolutely not worth investing in. Million is down over 93% from its all-time high.
In my experience, most people have the wrong and weird assumption that cryptocurrency is this get-rich-quick scheme that doesn’t require any sort of thinking. The main appeal to cryptocurrency is that it gives everyone, rich or poor, equal footing to make a lot of money and no one is privy to unique information or special privileges.
But to get to that point, it requires a lot of work. Investors need to be informed and make the right business decisions to get a big payday. Some people just aren’t willing to do the homework.
No Clear Goals
Ask yourself these questions: “what are my goals for cryptocurrencies?” “do I have a plan on when to buy” and “what do you hope to accomplish?” These three questions are important to figure out how you should go about investing.
It’s difficult to make a plan, especially when you don’t know why you’re investing in the first place, but not having one makes it more likely that you’ll make mistakes or rash decisions.
You might make overly emotional decisions, perhaps selling too early or too late.