Expensive Crypto Lessons That Can Save You/Make You Thousands

I recently invested in a summer pass for a new bowling alley that opened close to my house. It would be a fun and easy way to bond with my kids and get out of the house. The only problem is I suck at bowling. The first couple of games, my kids destroyed me. They had bumpers and watched me in frustration as I chucked multiple gutter balls. After a few weeks and several more games, I’ve gained experience and can break the three-digit mark (something I had never done before).

While I’m still not technically ‘good,’ I’m having a lot more fun with the successes I have. Unfortunately, a gutter ball in crypto can cost tens of thousands of dollars (or more). I’ve thrown a lot of gutters. They always hurt and typically cost me a lot of money.

I’ve been drained for thousands, rug pulled for thousands, exploited for thousands, and not booked gains costing me thousands. I’ve lost large sums trusting companies to custody my crypto and overselling myself on opportunities. Regretfully, I’ve made some of these mistakes more than once. I guess that makes me somewhat remedial.

And, unfortunately, if you are in crypto, you are likely to make several mistakes as well. But, like bowling, at some point, you will realize that these gutter balls or mistakes are painful when they happen but easily forgotten when you throw your next strike.

I’ll give you a quick example: I connected to a malicious airdrop site in January that drained thousands of dollars of crypto from my wallet. I felt upset at myself and embarrassed for making such an idiotic, rookie mistake. A few months later, I received the Runestone airdrop, canceling my losses.

In this article, I’ll summarize four important lessons I’ve learned that, hopefully, you can pull something from.

Lesson #1: Book Profits and Take Them Out of Crypto

In my first cycle, 2017–2018, I watched as my Ripple investment went 20x in a matter of months. I remember thinking, “I can be a millionaire if XRP can keep this trajectory for a few more months.” A couple of years later, I sold my XRP for the same price I had purchased it. I did a complete round trip.

Last cycle, I told myself I wouldn’t make the same mistake. And luckily, I didn’t. I booked profits, but not nearly enough. While I sold many coins last cycle, I kept the stables in crypto when I should have been converting them into a savings account or the stock market. I lost almost all these stables due to a rugpull and by purchasing NFTs that are still 95% below their highs.

I did offboard some of my funds, but not enough. And, by keeping my profits in stablecoins, I made it too easy to invest in the hottest and newest narrative.

Some people create profit goals for each investment. I’m not very good at that because I’ve seen investments go from $9 to $475 quickly and regret selling some for $40. So, this cycle, I’m going to scrape profits and certain goalposts. For example, I will sell a portion of my portfolio when the crypto market cap hits $3 trillion, $4 trillion, and so on. I will take said returns and move them out of crypto to savings or a stock trading account.

I’m also experimenting with creating goalposts on certain parts of my portfolio. For example, when I recently invested in my three favorite memecoin plays (WIF, PEPE, and BRETT), the memecoin market cap was $60B. Today, it’s down to $50B. Great timing, right ;) When the memecoin market cap hits $100B, I will sell a portion of that investment group and offboard it from crypto. Then I will do the same at $150B, $200B, etc.

Many crypto investors have their strategies, and I recommend finding something that works for you. However, I can’t stress the importance of withdrawing funds from the casino. At this point, crypto is a casino. Real utility, use cases, and real-world adoption will probably not happen this cycle (if they ever do).

Lesson #2: Pay Better Attention to Tokenomics and Teams

Last cycle, I speculated on crypto assets because they were popular or had a great story. It worked because almost every crypto went up during the altcoin bull. Today, there are at least ten times as many options. Most of these platforms are forks and offer no added benefit. This time, projects launch at higher valuations, and first adopters/investors are exit liquidity.

I’m not only referring to release and vesting schedules. Last cycle, I bought a Multichain token and converted it into veMulti on a four-year lock. It didn’t even take one year for the Multichain team to rug everyone, leaving my veMulti worthless. I couldn’t even sell it when it was crashing. I will refrain from locking up tokens for any period of time or only do so with small investments.

99% of anonymous teams are in this space to make money any way they can. Devs will lie, cheat, and steal from their communities. If a team is anonymous, assume the token will go to zero. This isn’t to say you shouldn’t/can’t invest in an anonymous team. But you must do so with your eyes open and be prepared to lose everything quickly.

Lesson #3: Try to Left-Curve More Often

Three popular terms describe crypto investors- left, middle, and right-curve investors. The left curve is the lowest common denominator like I was in the first cycle. In the last cycle, left curve plays were memecoins, OHM forks, referral tokens, and NFTs. On the other side are right-curve investors who only invest in high-IQ projects and look for the diamonds in the rough. I was trying to be a right-curve investor in the last cycle.

Then, the midcurve investors try to tackle everything and then get stuck in the middle. They hold their tokens too long, fall in love with projects, and often need to spread their investments more thin. This was me last cycle. I was trying to be on the right curve but was a disillusioned mid-curve bagholder for many projects.

In retrospect, my most successful investments were my left-curve investments and my right-curve investments (BTC and ETH). I got lucky with Drip, some OHM forks, and a few NFTs, but I completely missed out on memecoins, which made many people rich. I ignorantly thought memecoins were useless.

This time, I am more open to embracing narratives even if they logically sound stupid. All you have to do is read a whitepaper, and you can tell that 90% of retail will stick with simple and easy investments. Our best hope is to create and build these narratives and take advantage of the Greater Fool Theory.

Lesson #4: Employ Patience, Keep a Plan, and Expect to Make Mistakes

Even a plan written on the back of an envelope is better than no plan. By creating and sticking to a plan, you will give yourself the best chance of succeeding. During the last cycle, I planned to purchase Bitcoin daily. That one planning item has worked out superbly.

Your plan may include rules on which assets to invest in, when to book gains, and when to add to holdings. You may want to have core assets you keep and sell the rest of the vaporware. You may want to risk a percentage of your portfolio on leverage. Stick to that limit.

Crypto has a way of psyching everyone out. Unfortunately, there is so much noise between Crypto Twitter, Telegram, YouTube, the mainstream media, Medium writers, and Discord. It’s tempting to sell everything one day and then buy again a few days later. Everyone is an expert because they want you to follow them, buy their services, or use you as exit liquidity for their tokens.

The talking heads often mention 20 projects and have a few that take off. Typically, they have many losses or mistakes but magically forget to talk about the losers. I’ve purchased a lot of bad projects and talked about them. I will be the first to admit that I know nothing more than you do. Everyone in this space is clueless and tries to think they have an edge. The smartest and safest thing is to buy and hold Bitcoin.

If you’re going to be a degenerate, expect to make mistakes. There are many bad actors in this space, and the lack of regulation gives us an opportunity to make a lot of money and also to get swindled by people who are some of the biggest political donors (Sam Bankman-Fried).

When you make mistakes, admit them and try to learn from them. Every good investor (outside of Congress) has made mistakes. I sold ETH at $120, but that didn’t prevent me from buying back in at a higher price and profiting from ETH later.

Key Takeaways

The market is boring right now. Without too much action, it’s a good time to create a strategy. Because once things start moving, they move quickly. Instead of participating in the mental masturbation on where markets are going tomorrow or next week, try to think out a few months and a few years.

Give yourself leeway to make mistakes. Do your best to find the lesson and avoid repeating the mistake. Everyone in crypto throws gutter balls. Finally, have optimism. The crypto markets will go much higher from here. Don’t let the haters head-fake you into thinking the cycle is over because there’s a lot of green grass on the other side.

Do you have any crypto-investing mistakes that taught you an important lesson? Please share them in the comments. Do you disagree with any of my lessons? Is it possible to have an edge and not be an insider?

If you made it this far, thank you. Please clap for the article; it helps me, and I will get it in front of more eyes.

This information should not be taken as investment advice. I am no more qualified to give financial advice than to dance like a ballerina. Digital assets like crypto and NFTs involve risk, so you should always perform due diligence before investing.

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