The top 11 things to avoid in crypto

@andreydidovskiy

Digital Asset Investor & technology connoisseur laser focused on bringing incredib...

Credibility

Success in life is defined as much by the actions that we take as it is by the actions that we avoid.

It is much harder to build momentum than it is to break it.

Doing 10 good things builds momentum in a positive direction; doing just 2 bad things can destroy that momentum & set you off on a spiral out of control.

This is called the law of negative interference.

The cryptoverse is full of this negative interference.

Operating in this nascent asset class takes a herculean amount of emotional resilience and intellectual prowess. So much rich data, fake news & criminal gurus floating the space that it can get extremely overwhelming.

Your decision-making faculty is constantly pushed to the limit.

Your emotions are getting tested.

Your brain is playing tricks on you.

Your net worth is swinging from 6 figures to 6 dollars.

As unsexy as it may seem on the surface, emotional well-being is the single most important factor in the attainment of what you desire most.

Here are 11 common mistakes both beginners and veterans make, that if you can avoid, will drastically improve the quality of your life.

1. THOU SHALL NOT: Blindly Follow Anons on Twitter / Social Media

Back in the early days of the internet (before my time), there was a higher level of integrity amongst the users. Anonymous people would just help each other out from the kindness of their hearts. As the internet evolved and everybody became connected through social media, human nature began to seep through the cracks and malicious, low-quality individuals began to take advantage of unknowing people.

Twitter stands at the forefront of the psyops happening in crypto.

There are so many fake accounts that have been created just to dupe people in acting a certain way. Faceless accounts with 250,000 followers and the words “DEFI”/”NFT”/”Crypto” in their bios pretend to know something you don’t, act smart, and use sophisticated words and memes to shit post all day long about trash projects. I don’t know who needs to hear this but 99.9% of those accounts are botnets created and operated by insider teams to dump their tokens on the public.

It’s okay to have a few trusted sources that you use to just gather some ideas from in order to carve out your own thesis. The only real way to find reputable accounts is by observation. Find some potentially good accounts, watch what they do, and track the results. Odds are that over time, the majority will disappoint or just plain out disappear; and a tiny handful would be true alpha signals.

2. THOU SHALL NOT: go “ALL IN” *all at once

The golden rule of getting into Crypto is DCA. Be patient and enter your position gradually over the course of time. Set a hard committed schedule and stick to it. If you don’t and decide to dive off the deep end by throwing your entire net worth into crypto, dear friend be prepared for the emotional ride of your life…

The pain of loss is amplified more greatly than the joy of victory, that is the simple law of human emotions. Crypto is volatile. Crypto is manipulated. Crypto is the most difficult asset class traders have ever had to deal with… it is also the most profitable.

There is a caveat to this point. If you are emotionally numb to pain or have some transcendent monk-link mastery over your emotions (while still being able to support your life), then this does not apply to you.

3. THOU SHALL NOT: margin Shitcoins

Unless you are a savant or an insider, margin trading in crypto is LITERALLY juggling flaming knives.

Margin trading is a zero-sum game. Either you make it or you lose it all.

As alluring as it may be to imagine overnight gains of 1,000% that will change your life forever, understand that those thoughts are the sirens of human destruction singing in your head. Greed will force you to rush, be calm like water, ebb and flow with the contours of life and you will get everything you desire and more. Be caught in the drifts of blind desperate greed and kiss it all goodbye.

You are smart, you are capable and you will be successful… unless you continually repeat the same mistakes that cause you to lose everything.

4. THOU SHALL NOT: Impulse buy/sell

Easier said than done.

Sometimes you might get an emotional wave (positive or negative) that washes over you; it could be triggered randomly by anything, a subconscious thought repressed in the back of your mind that got sparked by a sound you heard or scent you smelled. It doesn’t matter if you want to prove your ex wrong, impress your idiot friends, or any other emotionally charged (but ultimately pointless) thought.

Yes, prices can fall suddenly and continue to fall unexpectedly. Sure, maybe you would have been able to save 5% if you sold earlier. But remember that timing the market is nearly impossible. Nobody knows where the top was/will be and nobody knows the bottom. Once you have a strong plan in place, stick it out and you will be rewarded.

Crypto is a long-term game.

Impulsivity is short-term thinking.

5. THOU SHALL NOT: listen to mainstream media

Not much to say here, if you listen to mainstream media for advice on crypto you might as well just sell everything and forget about it until it’s too late…

Mainstream media is designed for sheep to consume information and for insiders to offload their bags. It is engineered to emotionally discourage you and keep you frozen in a loop of uncertainty.

The best example of this foolery can be seen through everybody’s favorite countersignal, Jim Cramer. Every time this man claims something, the absolute opposite happens. I am not suggesting that you go out there and countertrade his calls, just do some research and make your own decisions. (NFA) (here is a hilarious example of Jim’s #BTC call)

6. THOU SHALL NOT: spend crypto

This is absolute blasphemy…

Depending on where you are in the world, if you pay with crypto, you will pay double taxes a tax for realizing gains at the time of the transaction (conversion from crypto to fiat), and a second tax for the sale itself.

Moreover, whenever a provider sells the crypto first in order to make the purchase in a fiat denomination, they do so at a spread. For example, Solana is $50. You want you to buy something that costs $100. If you were purely spending crypto, it should cost you 2 SOL for that transaction. Not gonna happen. The provider will have a spread for the sale (0.1–1%) plus they will have their own fee on top of that another (0.1–1%)… so by paying in crypto everything will always be more expensive…

7. THOU SHALL NOT: Hodl all of your crypto in 1 location

* This is only applicable if you have a substantial portion of your personal wealth in crypto. If you have like $5,000… don’t stress over this too much.

As annoying as it may seem to some people, the wisdom of distributing your wealth throughout multiple different storages provides an unparalleled level of security.

Having to store more private keys and not being able to access all of your funds immediately certainly adds some logistical complexity. However, it will protect you in the case that you lose access to any single wallet. It will also protect you in the event of an abduction. This is not a joke, people have been kidnapped and extorted for their digital assets (don’t flaunt your wealth around, enjoy it with your family and loved ones).

8. THOU SHALL NOT: Hodl all of your crypto on CEX’s

You might have heard the timeless crypto wisdom of “Not Your Keys, Not Your Coins” many times.

Perhaps you might have seen the crazy sh*t that happened with FTX or know about MT. GOX. Centralized service providers act as custodians for all of the assets on their platforms. Any time you deposit your assets into a centralized exchange, the exchange puts the assets on its balance sheet and allows you to trade with its balance. In the event that something drastic happens you are classified as a depositor and depositors will almost never be first in line to claim anything.

9. THOU SHALL NOT: forget the hard times

I promise you, if you stay involved long enough, you have a good chance to make life-changing money. When you do make that money, it can get to your head.

Whenever you make good money, take a little more than what you need and get yourself financially secure. As your net worth grows you must do everything you can to secure your own future.

My own very humbling experience took place and after a long year of licking my wounds and regaining control of my life, I swear on all that is divine, be grateful for everything you have and you will always have more than you need.

10. THOU SHALL NOT: Rush to Pay Gas Fees

There are many vectors of value within the decentralized economy. The most powerful and opaque to retail participants is the gas fee market also known as MEV.

MEV is the acronym for maximum/miner extractable value. These are subtle markets that exist only on the level of the node service providers. Nodes are incentivized by network rewards and transaction/gas fees. The higher the fees, the more the nodes earn. While the infrastructure may be decentralized in terms of who can join when the fact remains that they all share the same driving force to increase their incomes.

* It is my personal opinion that these unseen/untradeable markets drive sinister action in the form of inflated network fees (as exhibited by Ethereum the last bull market).

Try your best to minimize the amount of activity you must do on-chain. If you need to execute a transaction, be a little patient and see where the cost varies over time. Don’t rush, it is almost guaranteed that the first price you are quoted to do something will be higher than necessary.

11. THOU SHALL NOT: Invest before first researching

Don’t chase the hype. Invest only what you can, in what you know most about.

It is tempting to be considered brilliant for catching a trade early. Don’t get swept up into the hype of other people making money on something. Just because others have already made money on it, does not mean that it will continue to perform the same.

If you take the time to DYOR you will eventually stumble upon something great that is still at a very early stage. Once you develop a genuine understanding of the technology, its potential application, the target audience, and the capabilities of the developing team, you can consider allocating capital. (never financial advice)

This list is by no means exhaustive, there are plenty of other mistakes that can be made on the journey through the digital economy.

These are not rules that are meant to be broken, they are just guidelines that have been generated through personal experience.

I hope you picked up on the common theme persistent throughout all of these points; emotional intelligence is the ultimate key to success.

Tremendous wealth has been built & maintained by the world’s most savvy financiers. If you pay attention to their actions, you will see that, just as important as it is to maximize returns, it is even more important to control/minimize risk.

Thank you for reading!

May your bags always be full & your emotional state healthy.

Live long & Prosper ??

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