Top 3 crypto mistakes you must avoid (do not ignore this)

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The hard part of crypto? Controlling your emotions.

Welcome to another issue of Passionate Income.

Today, we’ll be discussing the lessons I learned from screwing up a $1,500,000 crypto trade in 2022.

My goal in sharing is so you can learn from my mistakes, allowing you to get on the fast track to wealth now that crypto is heating up again. So let’s dive in.

I’m embarrassed to say this, but it’s true:

In 2021, I made a $2,500 crypto investment that - had I played my cards right - would have been worth over $1,500,000 just nine months later.

Here’s how things went down. After I explain what happened, I’ll share my mistakes so you can avoid making them yourself.

The Timeline

June 2021 - Buddy of mine who’s extremely smart, and very successful, announces he’ll be launching a crypto coin.

July 2021 - I decide to get involved and put $2,500 into the launch.

July 2021 - The coin jumps right out of the gate but quickly drops, leaving me at a loss if I were to sell. I decide to trust my buddy and hold on.

August 2021 - I go deep down the crypto rabbit hole. Studying DeFi, day trading, exchanges, everything.

September 2021 - My buddy’s coin starts going up. Soon as I get into profit a little bit, I sell so I can free up my funds to invest in other projects (that have been going up even more). This was my first mistake.

October 2021 - My friend’s project is stalled. But my other trades are making solid profits. Only problem is: I’m chasing trends (like a newb) and not making nearly as much as some of the guys I’m following on Twitter.

November 2021 - Bitcoin does a double top and starts to crash. This would mark the beginning of the bear market. On the flip side, my friend’s coin has gone up 10x since I got involved. Angry I missed out on a dead easy 10x, I decide to jump back in.

December 2021 - May 2022 - I make solid profits on my friend’s project, but I keep jumping in and out chasing trends. Sadly, every time I get out, my buddy’s coin skyrockets. So I end up constantly buying in at a higher price.

May 2022 - At it’s peak, my friend’s token did a 1,000x from the launch. I check the price daily. It shows my initial investment would have been worth over $1,500,000 had I l just left it in there and not touched it 😔

May 2022 - After six months of being one of the Bear Market’s strongest performers, the whales start dumping my friend’s token. It crashes from $19 to $11 almost immediately. I keep holding on hoping it’s going to get scooped up. Sadly, it never does and I manage to get out at $7 (for a modest profit).

On the flip side, my buddies - who bought at the launch and held on - made life changing money.

My Mistakes

If you have experience with crypto or trading in general, you know my story is a tale as old as time. It’s the classic Crypto Newb story.

But it didn’t have to be that way. Yes, hindsight is always 20/20. But had I know what I know now, I could have banked over $1M extremely quickly.

So, here’s a list of the mistakes I made. If you’re serious about crypto, I recommend you save this and reference it often.

#1 - No Legitimate Plan

Similar to many newbs, I had no real plan with regards to what I was doing. I literally just threw my money into coins I hoped would go up and then prayed. This is NOT a winning approach.

To hit it big in crypto, you need a plan. You need to define your risk tolerance, when you’ll take profits out, what you’ll do with those profits, etc. If you’re not following a well thought out strategy, you’re gambling. Period.

#2 - I Fell Victim to My Emotions

The good news about the above story is that I got in and made a profit. The bad news is that I was an emotional basket case while it was happening.

If the markets were going up, I was ecstatic.

But when they started going down, I panicked and made all the wrong decisions. Once again, beginner behavior.

Having a plan means you have a North Star to follow. A guiding light that helps you make decisions.

But if you don’t have one, its virtually guaranteed you fall victim to your emotions. You get caught up in the hype on social media. You think the world is ending. You start believing in conspiracies. Do not do this.

Winners follow a strategy, not their emotions.

#3 - I Didn’t Understand How Crypto Works

This ties in with not having a plan, but is more focused on education. See, crypto follows certain patterns. Here are some examples:

Bitcoin goes up —> ETH goes up —> Altcoins go up —> Shitcoins go up.

Here’s another:

Money flows into L1 protocols ➡️ Then it flows into the protocol’s main DEXs ➡️ Then it flows into DeFi and Utility Coins ➡️ Then it flows into Meme coins.

These are time tested patterns that - once you understand them - can guide your investing / trading strategy. But I didn’t know any of this stuff.

Instead, I was making random bets and crossing my fingers they’d work out. This is NOT a winning strategy. You need to understand the game you’re playing and how it works on a fundamental level.

💡 Takeaway: If you go deep enough down the crypto rabbit hole, you eventually realize all the OGs made the same mistakes I did.

But instead of giving up, they learned their lessons and made smarter decisions the 2nd (and 3rd and 4th) time around. Because of that, they made life changing wealth. And if you follow their path, and learn from their mistakes, you can too. I’ll be ready when the next bull run comes around, will you?

I'll leave you with this quote…

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