It’s quick to lose all your cryptocurrency investment if you failed to follow market strategies meticulously, it is easy for money to disappear even in a bullish market.
Here’s a true story of an investor who lost everything and what can be learned from it.
It’s easy to get hooked on achievement stories when the bull market happens. Despite that, it’s critical to understand that it’s not all glamorous and anxiety; losses occur, and they will cause damage, notably if you’re not ready or lose control.
An investor tweeted regarding how he lost his entire $185k portfolio in just three weeks. This is verifiable via his Ethereum address. The thread is sobering. It’s a great example for traders to read. This is for them to bear in mind that bull markets never last forever – No Investors should be absorbed in enthusiasm when trading.
How it went down
It all happened on April 11. As claimed by the investor, ‘alt season was in full swing.’ He was invested in a stable portfolio with comparatively low volatility.
Still, he got eager and began overtrading on Uniswap to make quick earnings. Things didn’t happen as expected. His market timing tactics played out incorrectly, and he ended up making terrible trades—this resulted in more than 50% loss.
On the 20th, out of misery, he moved a considerable sum into a high-volatility cryptocurrency with inferior firm fundamentals and a greater chance for quicker gains (and faster losses!).
This pattern continued, where instead of making reliable mid to long-term plays, he kept investing in more volatile/risky currencies to gamble his portfolio back quickly. Yet, the last coin he invested in rug pulled, and he lost almost everything.
What Can We Learn from This?
Undoubtedly, investors can draw plenty of lessons from this, but let’s focus on the most critical ones.
Never take gains for granted. A cryptocurrency market is a fickle place, and it can take just as fast as it gives. Bull markets indeed don’t last forever, and people need to remember to periodically lock up gains into safer assets instead of holding onto volatile, risky investments.
Don’t let emotions cloud your judgment. Once a loss happens, it’s usually best to step back and take a break from the market to cool down. Without this, you may risk ending up revenge-trading, and your emotions will cause you to make irrational decisions, like investing in more risky ways or taking on more considerable leverage.
Stay invested within your risk profile. If your risk craving is limited to 10-20% swings; stick to the more significant cryptocurrencies with larger market caps. Suppose you’re going to endeavor into the land of small-cap cryptocurrencies on Uniswap or PancakeSwap.
In that case, you must be resilient enough to brave much higher swings, as are expected for such coins. Without this mental preparation, you are bound to fall prey to emotion.
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