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7 Mistakes I Made When Investing In Crypto

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@muratkbesiroglu
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I made my first crypto investment at the end of 2017 when cryptocurrencies were valued more than 30 times in a year. In the middle of 2018, I started writing on Steemit. Since those days, I have been closely interested in the crypto world. Although I am satisfied with the return on my investments, I also made many mistakes. In this article, I want to talk about these mistakes.

Unable To Predict the Wavelength of Price Movements

I thought that I could apply what I learned in the stock investments I made since the 90s to cryptocurrencies. However, it was like comparing the waves formed in a swimming pool with the waves of the ocean. The price volatility in the crypto market is too much even for a country like Turkey with high financial fluctuations. In the stock market, gains and losses are expressed in percentages, while they are expressed in multiples in the crypto market. Therefore, our money could increase 10 times or decrease 5 times in a few months.

Investing in a Single Cryptocurrency

Years ago I took a personality test of several hundred questions. As a result of that test, my most distinctive feature was found to be cautiousness. So I actually made my first crypto investment with a small portion of my total savings. If I had the experience, I would split my crypto budget into at least two or three parts. Although I have not lost money on my Steem investment it cannot be said that I have made a significant profit.

Investing During the Peak of the Bull Market

Individual investors are usually entering the crypto world at the peak of the bull market. Especially if they have a dream of making a profit in the short term, they are actually doing a very difficult job: They are making losses in the crypto market, whose value is increasing 2.4 times on average every year. When the market calms down and prices fall to reasonable levels after 6 months, they do not reconsider their investment opportunities. Although I have sold a portion of my Steem portfolio in 2019, I carried most of them to 2021.

Not Taking Security Seriously

Unless something bad has happened to us, we tend to underestimate the risks. Before a significant amount of Ethereum was stolen from my Metamask wallet last month, my security awareness was quite low. I started to implement measures such as using more than one Metamask account, paying attention to the sites I go in and out of, and using a hardware wallet after the theft I experienced.

However, I was aware of facts such as Bitcoins that evaporated in the central crypto exchanges, the inability to reverse the wrong transfers, and the crypto stolen from the smart contracts. I am now acting more cautiously, confirming the Turkish proverb that one misfortune is better than a thousand pieces of advice.

Investing in Inflationary Tokens

As a former banker, I firmly believe in the potential of the DEFI world. That's why I invested a lot in this area when I met the DEFI concept in early 2021. I generally made a profit from the investments, but as my awareness of token inflation increased, I began to be able to evaluate the APYs offered by DEFI applications very well. Also, when I review the coin inflations collectively, I understand why some coins that I like in terms of their basic features do not increase in value.

Lack of Technical Analysis Knowledge

Until the beginning of this year, I thought that technical analysis was a controversial discipline like astrology. I thought fundamental analysis could provide the most important information. In other words, I believed that the utility provided by the relevant coin determined the price movements in the medium term. However, in-depth research on technical analysis showed me that price movements are just as important as utilities.

Investing in Unaudited Contracts

Hacker attacks on DEFI contracts in April and May occupied an important place on the agenda. Although audits by reputable companies such as Certik and Slowmist do not eliminate the security risks that may occur in contracts, they ensure that the probability is greatly reduced. Several DEFI yield farming applications that I have invested in have been hacked. Even though I didn't have any financial damage, I learned a lesson from my mistake.

Conclusion

I believe that the crypto world is offering the participants a unique window of opportunity that will last 5 to 10 years. Although I have made many mistakes so far, I still find the crypto market attractive and believe in the importance of being in the game.

The biggest mistake that can be made about crypto would be to be indifferent to this market.

Thank you for reading.

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