Advice I Wish Someone Gave Me When I Started Investing in Crypto

Reading time: 4 min

I remember it like it was yesterday.

I’m slouched over my laptop, eyes glued to my screen, heart pounding with a mix of fear and excitement.

The day was January 12, 2018. And I was about to make my first crypto investment.

The crypto of choice? An altcoin called NANO that some Redditors swore was the “next Bitcoin”.

I hit the buy button, my hand shaking as I finalized the transaction.

Transaction complete.

I officially took my first step into the crypto world—and I wanted more.

Drunk on optimism, I started endlessly scrolling Reddit, joined hundreds of Telegram channels, and watched hours of YouTube videos looking for the next “hidden gem”. Visions of Lamborghinis, rare sneakers, and mansions danced in my head. I quickly poured more of my savings into various altcoins that were promised to go to the moon.

But that high didn’t last long.

Everything plummeted after a couple of weeks. And continued to drop over the following months.

My savings evaporated. My tokens were now worth less than a meal at my favorite sushi spot. Desperately wanting to win my money back, I tried day trading which put me even deeper in the hole.

I've learned a lot about investing in crypto in the years since then. And I discovered some valuable lessons that would have saved me a lot of frustration and money.

I can’t turn back time and undo my mistakes, but I can help others not make the same ones.

So, here are 3 pieces of advice I wish someone had given me when I first started investing in crypto.

Let’s get it.

1. Build Your Foundation

When I first started, I was like a kid in a candy store.

There were so many tokens to choose from, and I wanted a piece of everything. Every token sounded like the next big thing.

Decentralized voting? Game changer.

The next Ethereum? I’m a genius for stumbling on this.

That one coin with the funny name? Bought some of that too.

Here’s what my initial portfolio looked like:

• Nano (NANO)

• Bounty0x (BNTY)

• Vibe (VIBE)

• Horizon State (HST)

• Genesis Vision (GVT)

Haven’t heard of them? Exactly.

They didn’t recover after that bear market. Some vanished completely.

After my initial crypto plunge, I started day trading altcoins thinking I could outsmart the market. Boy, was I wrong.

Altcoins and NFTs might come with high returns, but they also carry high risks.

After taking L after L, I realized I would have been better off sticking with “boring” crypto investments like Bitcoin and Ethereum.

So, my most important lesson for a new investor is to start with a solid foundation.

Think of your portfolio as a house.

Bitcoin and Ethereum are the foundation, the structure that holds everything up. You can decorate your house with all sorts of fancy things (altcoins and NFTs)—but without a strong foundation, your house would crumble.

For example: A good rule of thumb I follow is to have 60-80% of my portfolio in Bitcoin and Ethereum. The rest can be allocated to other promising assets.

Having a strong base gives you some stability amidst the wild swings of the crypto market while also having exposure to potentially high-growth investments.

2. Automate Your Investments

I constantly stressed about timing the market when I first got into the game.

I’d obsess over charts and prices. It was nerve-wracking and time-consuming.

Then I discovered the power of automating investments.

Automation in investing is like having your own financial butler—always there, always working, and not requiring you to lift a finger. And it doesn't get caught up in the hype or panic when the market gets a little wild.

With automation, you set a system where a certain amount of money is taken from your account at regular intervals.

For example: Instead of trying to time the market and invest $1,000 at once, you could invest $100 every week for 10 weeks.

This approach is also called dollar-cost averaging and is a tried-and-true strategy in traditional investing.

You take the emotion and the stress out of the equation. And it also helps you build your portfolio steadily over time.

You're not worried about trying to time the market perfectly. You're not making panic buys or sells. You're just steadily accumulating regardless of price swings.

This also gives you more freedom. You're not chained to your device, constantly checking prices. You can go about your life, knowing that your investments are chugging along in the background.

It's a stress-free, hands-off approach to investing that gives you peace of mind.

3. Have an Exit Plan

Setting exit targets is something many new investors overlook.

You often hear stories of people who made a fortune in crypto. But you don't hear about the countless others who didn't sell at the right time and watched their paper profits evaporate.

Setting an exit strategy doesn't mean you're not believing in the long-term potential of crypto—it means you're being smart about securing your profits and reducing your risk.

Decide in advance when you'll sell a portion of your holdings. It could be when you've made a certain amount of profit, or when the price reaches a specific number.

For example: If a token jumps 100% then I’ll sell half to cover my initial investment and reduce my risk.

Whatever you decide, the most important thing is to write it down.

Trust me. When things start pumping, all you’ll be thinking about is the moon. You need to have a plan beforehand.

My early adventures in the world of crypto were painful, but they were also some of the best lessons I could ask for.

I hope this helps you on your investing journey.

Peace,

Fifty Sat

Song of the Week