If you have spent longer than 24 hours in the crypto space, you will know by now that they are a highly emotionally charged market.
It can get to you too if you don’t keep yourself in check. The pumps are incredible and you start booking test drives for your Mercedes G Wagon or you start googling “Does my driving license cover yachts?”.
The lows however are equally intense. Each leg down, you cross off one more internet tab that was once holding a ridiculous purchase that you had in mind if it “just went another 10% higher”…
The 10% higher never gets there, it always turns in to 20% and then 30 and then 100%. Greed is a powerful thing and so is market stress and anxiety.
Coming to terms with having to scrumple that 4 weeks notice up and or at least put it on ice for a while until you can achieve those financially free times you have always dreamt about.
It’s the hope that kills you…
But it isn’t all doom and gloom. The thing is about market cycles is that they’re… erm… cyclical.
If anyone tries to tell you that cryptocurrency and its markets aren’t rooted in emotion, you can say, one four-letter word that completely destroys their argument. D.O.G.E
Elon Musk can tweet a doge meme and it has the cryptocurrency market running to their nearest doge exchange and hitting the big green button.
You can’t be successful in this space trying to catch these pumps. Many have tried, just as many have failed. It is unsustainable.
You need a strategy or at least a general rule you stick to. Being in control in a logical way is a great way to remove emotion from any trading. This way you are less likely to rush into trades or open stupid positions chasing pumps.
Investing small and often can, over time, generate a great and profitable portfolio, whilst reducing your risk to big market dips which are all too common in cryptocurrency. This way your average buy price can protect you from the dumps and also reward you on the pumps.
You can read more on dollar-cost averaging HERE.
What is the end goal?
Is it to hit an amount? Then what? Put it in the bank?
The goal is to make money, but why? There needs to be a purpose or it is aimless. You can’t conquer the world without a plan on how you are going to do it. This is for everything not just investing.
Is the end goal to invest in property? Good choice. Property over time is usually an appreciating asset.
Is it to make enough money you can find a more stable way to hold this money and passively earn enough interest to live comfortably? Another good choice…
Is it to buy a new pair of shoes and a nice car if you do well? With this kind of wasteless spending you’re not going to achieve that financial freedom. Hit the point where the car and shoes are paid for by the interest accrued on your investments. That is the end game.
We have more on high-interest pools and exit strategies HERE.
It is these sort of thought experiments you really need to sit down and write out. Once you have the goal you can focus the plan on how to achieve them.
All of these seemingly meaningless tasks are key to keeping calm and focussed during bad and good times.
Besides, if you have invested in a very strong project and there are a lot of them out there, who cares about dips? If anything isn’t it just a sale?
If you know from DYOR that a project has a very good chance of standing the test of time, then who cares about short time frame movements, they are irrelevant.
Just take it easy go for a walk and get out of the house. I know it is difficult in these current circumstances but just get off-chain for a while and do some real-word things.
If you are still finding it hard to shut off or you are feeling too anxious or stressed out, you may be overexposed.
If you have more than 80-90% of your net worth in cryptocurrencies (not including stable coins) then, as much as I would one day to be a full-coiner, you might be pushing it a little.
You should always have enough regular cash to cover your living expenses.
That is not financial advice that is just common sense. Whilst we are here, non of this is financial advice, don’t listen to me I am an idiot.
Back to the article
We may get to full-coin status one day and it will be great when the time comes, but for now, just keep the Ponzi pounds/dollars available.
These next few paragraphs, I want you to print out and stick to your forehead so you don’t forget them.
Patience. This is the most important thing in any form of investing. Just relax and chill out.
Coins we post on our Patreon (which you can join HERE) are not going to do 1000X in 30 seconds. We post them because they have value and long term value at that.
Take it from us who have lived and learnt, selling early or even worse underwater is a killer. Seeing a coin you got impatient with go to the moon hours after you sold is soul-destroying.
Getting back to market emotions, if you are thinking of selling, guess what? An awful lot of other weak-handed folk are too. Giving smart money the opportunity they need to load up at discounted prices and gain enough momentum to push to ATHs.
If you are particularly emotional, do the opposite of what you want to do…
Warren Buffet said, “the stock market is a place that transfers money from the impatient to the patient”.
He also said Bitcoin was like “rat poison squared” but I will let him off, I called it worse yesterday…
The flipside of impatience, you could argue is FOMO and diving headfirst into something you know nothing about.
The fear of missing out (I know some of you were searching $FOMO in Twitter or coingecko). When things are good and you have missed a few pumps you are eager to find the next one.
Don’t get me wrong this can work, but a swift entry and exit is probably best if the fundamentals of the coin are tragic.
You must, as always, DYOR. Especially in this age of decentralised exchanges and projects being able to be listed in a copy and paste fashion.
A good hype team or paid Twitter/Telegram community can do wonders for FOMO. So again, DYOR.
We hope this helps you have a bit of perspective and a bit of a laugh. After all, it is all a scam anyway… Just kidding, if you are particularly triggered by any of this, I can confirm you are overexposed.
Looking for a reliable and extremely easy to purchase, trade and store your crypto? Head over to AAX. These guys have it down to a fine art. Super easy, extremely reliable (no outages during busy times, we aren’t naming names…) and the most user-friendly interfaces out there.
Before you go…
Before you go, we have a Patreon page which is the price of a pint per month. It lets you know what we are buying and selling and when. It also has full access to my portfolio. You won’t get this access anywhere else.
You can join HERE
If you liked this article and want to learn more, we offer one-to-one support online to help you set up and get involved in the cryptocurrency space. Hit the ‘Book Today button’ at the top of this page to get started.
Alternatively, you can follow our group on Telegram for our side thoughts on the market. – @blocmates on Telegram.