Why do people lose money in Crypto? (featuring memes)

fairy cryptomother
Aug 31, 2018 · 4 min read

People buy the high and sell the dip

I assume the majority of people who purchase cryptocurrencies are investors or what we call in the community, HODLers, it uses the art of patience as well as a strong belief in the value of cryptocurrencies in the long term. The mistake that most newbie people make is waiting till prices are high when many others are rushing to buy, experiencing FOMO hence buying at the top or panic selling at the bottom.

RIP Crypto noobs
Psychology of trading

Remember when Bitcoin was at its all time high? Bitcoin’s price today is at USD$ 6941. RIP.

Not doing your research and due diligence

When you bought into a Shitcoin, is it really the project’s fault for creating one or is it your fault for buying into it instead? It is a fairly new market but it appears people still do invest blindly without ever understanding the technical and fundamental analysis of Cryptocurrencies.

I have a post published a while back on ways to tell if an ICO is a shitty project. Have a look or continue buying into Shitcoins.

Just do a quick search and you will notice plenty of these so called “Blockchain Consultants” and “Blockchain Experts” on Linkedin, or speaking at events. Legitimate or not, you decide. The simple rule of thumb is not to put money into something you don’t understand.

Invest only what you can afford to lose

I’m sure you’ve read or heard this piece of advice somewhere before. Every investment plan comes with a level of risk tied to it. Nobody asked you to place your entire savings into Cryptocurrencies, after all don’t all financial consultants preach risk diversification? Greed exists in all of us, hence the natural tendency to want to put in more money than you can actually afford, going for that huge payout and potentially losing it all.

BitMEX is a Peer-to-Peer Trading Platform that offers leveraged contracts that are bought and sold in Bitcoin. In short, it offers derivatives trading in the Cryptocurrency space for Bitcoin and some other Altcoins.

Newbie traders that aren’t familiar with the features of the trading platform and have not explored their testnet server, don’t have the habit of placing a stop loss and experience liquidations.

In fact, if you’re a sadist and take pleasure in the liquidation positions of BitMEX traders, there is a BitMEX liquidation bot on Twitter than you can follow.

www.liquidatemyshorts.com

Getting hacked

1–800-loseallmycrypto

We all know of the infamous incident of Bithumb getting hacked and losing more than USD$ 31 million worth of digital currency. While many exchanges have stepped up their security measures to protect their hot wallets, it simply is not possible to entirely eliminate the risk of a hack.

Many investors recommend storing your coins not in a wallet, that is controlled by an exchange but rather in a cold wallet. Such cold wallets look like a hard drive or USB drive, which is why it holds less of a risk compared to wallets stored on the exchange.

Patience is virtue

I cannot emphasize enough. Patience is key. Just as myself, fairycryptomother as I patiently wait for the next bull run before liquidating my crypto-assets.

RIP bulls

fairy cryptomother

Written by

21st century Mortician in her 70 year old family business X Blockchain Newbie. Taken a particular interest in FinTech, PropTech and MedTech.

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