Think Long And Hard Before Following Anyone’s Crypto Advice On Twitter
Nowadays crypto Twitter is full of bots, scammers and cult-like communities who blindly believe their coin is going ‘’to the moon’’.
Sadly, it’s hard to regulate the crypto & DeFi space for the time being, unlike stocks & bonds. Even influencers can ‘’shill’’ a memecoin.
As long as they include a disclaimer telling you to ‘’DYOR’’ (also known as ‘’DO YOUR OWN RESEARCH’’) because it’s ‘’NOT FINANCIAL ADVICE’’.
No matter how enticing it may sound, to invest in those meme projects in order to get rich overnight.
Try to stay composed and avoid falling for that trap. Very likely, you’re being set up.
Nowadays, everyone can launch a crypto token or a DeFi Protocol and promote it, for a 15,000 USD budget.
This includes social media pages, press releases, reddit posts, and an army of Twitter bots promoting the project on a daily. Often selling ‘’buy signals’’.
Acting based on a Twitter feed does not make you a savvy investor. At best, you’re just falling for the bait.
Influencers are NOT Financial Advisors
Most influencers’ services can be bought for a few thousands of dollars.
So if you’re a crypto project owner, you can simply spend 50,000 USD to get various tier 1 influencers to promote your crypto project to their communities.
Naive people will jump in as a result because ‘’John Paul endorsed NewDogCoin’’.
It doesn’t take an Ivy League degree to figure out that this is just an elaborate scheme to take advantage of desperate investors seeking to get rich overnight.
The crypto currency space has potential. Don’t get me wrong.
I genuinely believe many crypto currencies like BNB, Ethereum & Avax are great long term investments and will become indispensable parts of tomorrow’s financial system.
However, the emphasis lies on long term. Most of those who got genuinely wealthy holding crypto currency, did not purchase overnight. They DCA’d into project they believed in, and held onto it for several years.
Many retail investors are tricked, to believe that they should expect their portfolio to pump 50% in a single week. And so, as soon as their holdings dump by even 20%, most of them sell, and repeat the same cycle until their portfolio becomes insignificant.
As a retail investor, if you genuinely want to make money by investing in crypto currency, you need to start doing your own research, just like people do with stocks and bonds.
Secondly you need to have the patience, to hold and the ability to take profits depending on the scenario you’re in.
Investing in crypto currency should not be a gamble. Even if you’re investing less than 10,000 dollars a year, overtime, the money adds up and your opportunity cost becomes significant.
You’re better off investing that money into acquiring new skills, providing services or even simply investing it in an index fund than gambling on crypto, based on Twitter advice without having the guts to hold for the long term or take profits.
There is a lot of market manipulation going on in the crypto space.
Retail investors have no leverage or protection by the SEC against crypto whales, or most rug-pulls. So don’t let your ego, or cupidity mislead you.
Avoid Taking Advice From Twitter even with Large Market Cap Projects Like Ethereum & Bitcoin
We’ve all seen the bictoin Moon boys encouraging people to buy at 69K and changing their profile pictures to laser eyes.
I’ve personally witnessed cult-like discord group where people were told to sell all their belongings, get a loan and buy bitcoin when the price was still above 50K.
Flash forward, one year later, and nearly half a trillion dollars in market value vanished; laser eye profile pictures have been deleted, their tweets have been deleted too.
The same happened with the Ethereum merge, everyone was hyping up the fact that ETH would at least double in value after the merge. It didn’t, it lost over 30% of its value in a single week.
Buy the rumor, sell the news.
Getting rich in the crypto space is still very much possible. But avoid the hype, DCA into projects you believe in, based on fundamental analysis and hold for the long term. If you’re able to invest even 10,000 USD per year, earn a 10% to 30% average IRR on your crypto assets while they keep increasing in value over time, you could very much see a 5 to 20x increase in your portfolio value within a decade.
Don’t take out loans, avoid unnecessary leverage, you never know, the exchange itself might trade against you.
And if you don’t think you have the courage to hold when prices go against your predictions, just lock the crypto in a fixed term deposit that you can’t touch until maturity date.
My personal strategy is to hold 50,000 USD/USDC on a high interest savings account, that generates about 500 USD/USDC a month, and I use those funds to DCA into projects like AVAX, Bitcoin & Ethereum whilst preventing my capital from being liquidated. I sometimes also use the passive income to purchase books, learn more about crypto and invest in my other businesses to increase the deposited amount.
Overtime, my goal is to have 10,000,000 USD/USDC invested in a high interest savings account, and thereafter I can allocate over 1,000,000 USD/USDC towards crypto projects I believe in. Unlimited risk capital.
Don’t Let Anyone Insult Your Intelligence
Your coin’s price won’t skyrocket because you saw Matt Damon on an Ad for the crypto exchange where it’s listed, or because some obscure republic in central Africa decided to make it legal tender.
The bitcoin community likes to post such insignificant events as ‘’Breaking News’’, when they in fact have no impact over the price of bitcoin as a whole.
My neighbourhood coffee shop accepts Bitcoin & Ether too… I’m not making a headline out of it.
What I’ll never do is risk all my savings on a single project simply based on an irresponsible moonboy’s tweet.
I hope you found this opinion piece helpful. Leave me a clap and share. This would help me very much.