Despite bull-runs such as of 2017, investing in crypto is an incredibly risky and difficult endeavor to succeed in. Many often think the reason is that you have to become competent in complex charts and understand all the various terms traders use, but the actual reason is much simpler than that; Trading is incredibly risky and difficult because it deals with the human psyche, particularly the psychology of money.
Many traders fail because they’re afraid to lose too much money, so they panic sell when prices drop or get greedy waiting too long when it’s time to take profits. The mental fortitude required not to make any of these mistakes is almost inhuman.
The following short story deals with the age-old problem of getting rich too quickly, not taking profits and just being poor at money management.
The great thing about making millions by investing in crypto is that, for the most part, you don’t have to do any work. You buy a few altcoins, wait, and then all of a sudden you’re richer than 99% of the population, including those who work 40+ hours a week just to make $30k at the end of the year. Easy, very easy.
For many, the psychological impact of making millions during such crypto bull market was probably similar to winning the lottery (and we all know how most of those stories end up).
What Can Be Learned
Read through this story of a crypto investor who turned $32,000 into $1.2m and back to pretty much zero: It’s a story about a man that was lucky to join crypto right on time. As Bitcoin was reaching its $20,000 peak, instead of hedging and taking some profit, he leveraged his cyrpto trades even more and initialized crypto-related businesses such as mining. Do not put all eggs in one basket, have you read this before?
The end, well, you already know: With crypto prices dropping by 80 – 90%, you can’t expect a good ending to this tale. However, there is a lot to be learned.
1/ So here is a thread on how I turned $32,000 into $1.2m and back to pretty much zero (once taxes are paid).
Just note, I am not bitter or salty in any way at all, the last 2 years have been an amazing ride – travelled the world, been wealthy, been poor.
— Peter McCormack [Jan/3➞₿ 🔑∎] (@PeterMcCormack) December 13, 2018