There are so many ways to make money in crypto that it can be overwhelming. However, most of the losses that rookie investors make can be explained by one mistake:
They try to make money using every avenue instead of focusing themselves on one path.
Knowing the market is certainly necessary, but knowing yourself is even more important. If you know the type of investor you are, you can filter out the noise that is blocking your path to profitability. Let's take a look at the three types of crypto investors and how you can use that information to your advantage.
The Investor
If you are an investor type, you like to focus on project fundamentals. You make money when things make sense. You may even skip over short-term speculative opportunities because you know the underlying company is garbage. If this describes you, then you likely adhere to value investing principles made famous by Warren Buffett and Peter Lynch.
The current crypto market is an excellent place to be a value investor. When Buffett was investing in the textile manufacturers that made him rich, he was investing in an American market that was the equivalent of the 2020 crypto market — full of opportunity and relatively low market cap. Today, if you find the companies that form the backbone of tomorrow's Web3 infrastructure, you can become very wealthy.
What to avoid: Because you enjoy being "right" and finding the true gems, you want to avoid the fly-by-night projects that will take all of your time if you're not careful. If you're in the wrong Telegram groups or Twitter feeds, you can easily become distracted with quick hit profit chasing. The gamblers and marketers in these groups will certainly be bragging on their victories, but the path to those victories means taking on a completely different strategy from the investor. You won't get the same results if you don't do the same things, and your personality probably doesn't fit that process.
The Gambler
You're here for profit as fast as possible, and you are unapologetic about it. You don't need to be "right" about a company — you're perfectly willing to invest in a known scam as long as you sell out higher than you bought in. You are much more concerned with bragging rights than owning 5% of a cornerstone Web3 company.
If you're willing to put in long nights or learn how to program bots, you can create quite an income for yourself using short-term techniques. You have to watch the market more closely than investors and marketers because your victories are based on technical analysis. Crypto charts can move unexpectedly, and you have to be in place to take advantage of the volatility.
What to avoid: Many short-term speculators mistakenly try to come long-term investors if they miss a sell point or misread a coin's movement. If you miss a sell point, don't hold the coin hoping for a turnaround. Sell and take the loss. If you don't, in many cases, you'll likely end up holding the investment for far too long, losing money and tying up capital that could be providing you liquidity for new opportunities.
The Marketer
You make money whether markets go up or down because your primary value add is expanding adoption. This is why virtually every crypto scheme rewards you handsomely for referrals. The market as a whole is still in the distribution phase (less than 1% of people in the world have interacted with cryptocurrency or a smart contract), and everyone needs adoption. If you bring new users, you can make a lot of money.
Marketers love ponzi schemes. You are definitely a marketer type if the word "ponzi" isn't a cussword to you. There is plenty of money to be made in ponzi schemes like TronChain and Axion as long as you get in before the tide turns. Marketers are also quite adept at taking advantage of referral opportunities in gambling and investments.
What to avoid: Investors and even gamblers don't necessarily understand the marketer's viewpoint. Marketers who invest in ponzis and network marketing schemes will not receive much encouragement from those outside of their immediate circles. It is essential that you stay out of the circles that don't understand you, or you may try to take on their investment styles instead of taking advantage of your edge, which is people.
There are certainly people who can blend investment styles, but this requires a great deal of discipline and knowledge of the market. If you haven't mastered one style — or worse — haven't identified which of the styles fit you best, then you are best advised to stick to one. Once you are in profitability from one, you can easily invest in the others without fear.
