About a decade ago I thought I was being pretty clever. I had read a couple of articles, watched some videos on YouTube, and I thought I was ready to have a go at crypto.
These are expensive lessons I’ve learned so you can skip the pain.
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1. Thinking You Can Time the Market
What I did: Sold Bitcoin at $8,000 in anticipation of it crashing, only to find it hit $20,000.Why it’s deadly: Markets move faster than your emotions. You sell bottoms and buy tops.Do this instead: Decide on an affordable-to-lose amount each month and buy regularly. It’s boring, yet it works.
2. Going All-in on the Next Bitcoin
What I did: Invested $15,000 into a coin because some influencer said it would “10x in 30 days.”Why it’s deadly: If someone knew which coin would explode, they’d be buying it themselves, not telling you on Twitter.Do this instead:By all means, start with Bitcoin and Ethereum (70% of your crypto budget)Research any other coin for weeks before buyingNever invest more than 5% in any single altcoin
3. Storing Everything on Exchanges
What I did: Sunk all crypto in an exchange which got ‘hacked’ (turned out it was insider job)Why it’s deadly: When crypto sits on an exchange, you don’t actually own it. You own an IOU that can disappear overnight.Do this instead:Buy a hardware wallet for anything over $1,000Use exchanges only for buying, not storingRemember: “Not your keys, not your crypto”
4. Chasing Green Candles
What I did: Saw a coin pumping 50% and bought at the peak, thinking it would keep going.Why it’s deadly: By the time you see the pump, smart money is already selling to you.Do this instead:Buy when everything feels hopeless and boringSell when your barber starts giving you crypto tipsIf it’s on the front page of Reddit, you’re probably too late
5. Ignoring Taxes
What I did: Started with trading and earned 30k dollars, squandered every last penny of it, only to be slapped with a $12,000 tax bill.Why it’s deadly: Every crypto transaction is taxable. Yes, even the swapping of coins.Do this instead:Track every transaction with applications like Koinly or CoinTrackerSave 30% from profits for taxes on a yearly basisFind a Crypto-American accountant to advise you
6. Falling for Hype on Social Media
What I did: Bought coin for it had rocket emojis and diamond hands written all over Twitter.Why it’s deadly: Hype campaigns are designed to extract money from newcomers.Do this instead:Mute words like moonshot, 100x, and diamond handsResearch the team, technology, and real-world use casesIf the marketing is louder than the technology, run
7. Trading Instead of Investing
What I did: Tried Day Trading in crypto and lost 60% of my portfolio in three months.Why it’s deadly: You’re competing against algorithms and professional traders with million-dollar setups.Do this instead:Buy quality projects and hold for yearsCheck prices monthly, not hourlyRemember: time in market beats timing the market
8. Using Money Borrowed as Leverage
What I did: 10X in leverage investments — even visited banks thinking short gains will be emanated. Have lost everything in one trade.Why it’s deadly: Just like in gains, the leverage multiplies your losses. Even small moves can wipe one out completely.Do this instead:Never borrow money for investments in cryptoDon’t use margin or leverage until you’ve been profitable for yearsIf you can’t afford to lose it, don’t risk it
9. Having No Exit Strategy
What I did: Watched it shoot up from $5,000 to $45,000 back down to $8,000, which, of course, resulted from not knowing when to sell.Why it’s deadly: Greed makes you hold it too long. Fear makes you sell too early.Do this instead:Decide your sell targets before you buyTake some profits on the way up (25% at 2x, 25% at 5x, etc.)Keep a core position for the long term
10. Panicking During Crashes
What I did: Sold everything during the 2018 crash and missed the entire 2020–2021 bull run.Why it’s deadly: The crash looks like the end of the world, but it is really a buying opportunity.Do this instead:Expect 80% drawdowns as normal in cryptoBuy more when everybody is sellingRemember that Bitcoin has “died” 400+ times according to media
The Mindset That Really Works
After losing 50,000 bucks and learning this the hard way, I changed my whole way of thinking:
Decadal thinking over daily. Those who got rich through crypto were those who bought and held for a long period through cycles.
Boring wins. Dollar cost averaging into Bitcoin or Ethereum isn’t sexy, but it is effective.
Education beats speculation. Invest more in learning about this technology called blockchains than looking at price charts.
Position sizing matters. Never invest more than you can afford to lose completely.
Your Action Plan
If just starting:Week 1: Open accounts on Coinbase or Kraken. Buy in at $50 of Bitcoin.Week 2: Research hardware wallets and order one if you’re investing over $1,000.Week 3: Establish automatic weekly purchases of $25–100 according to what you can afford.Month 2: Start learning about Ethereum and how smart contracts are important.Month 3: Now, learn about other projects, keeping 70% in Bitcoin and Ether.
The Bottom Line
Crypto can be life-altering, but only if one survives the first year without these kinds of costly blunders. The market is going to separate you from money in creative ways. Your job is to be boring, consistent, and patient.
Ten years in the future and I wished I could just go back and smack my younger self. Since I can’t, I am hoping this article can slap some sense into you instead.
The opportunity is still very huge; just don’t be that person who learns lessons the expensive way as I did.
10 Crypto Mistakes That Cost Me $50,000 (So You Don’t Have To) was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story.