Most of us are striving toward the same goal while investing in cryptocurrency; to finally get ahead in life, have a financial cushion, and if we are lucky gain financial independence and become wealthy. The stereotype is that you either need to invest large amounts of cash, have a special skill such as trading, or just get lucky to make this happen.
While in some ways those are all true, the reality is that your success is determined by the decisions you make. Just like in your life, making a different decision here or there can send your life in a completely different direction. That is also true when investing in cryptocurrency. Making just one or two different decisions could be the difference between having no success, to changing your life financially forever. Many of these will be basic decisions for many of us, but often it is the most simplest of decisions that can have the most impact over a long timeframe.
Deciding to Invest in Cryptocurrency or Not
If you’re reading this article, this is already a decision that you’ve made. While it will seem like the most obvious piece of advice that to change your life with crypto, you must first invest in it. But the truth is that so many people ignore, or put off investing in this market for quite a long time. Those of us who decided to invest earlier have reaped the benefits and most people have regrets about not entering the space even sooner.
While prices may seem expensive, especially when compared to where they were years ago. The fact is that we are still very early in this market. The current stage of the cryptocurrency market has been compared to where the internet was in the year 2000. Which means there is still a lot of potential to grow. While we are jealous of people who bought Bitcoin in 2010/11. In the future people will be jealous of people who bought Bitcoin now.
Buy Blue-Chips or Altcoins
You’ve taken a great first step by deciding to get into the cryptocurrency market, but now you will need to make the most important decision in your crypto journey. Which coins should you buy?
For many, this is often a decision of whether to buy the blue chips (Bitcoin and Ethereum) or to take a greater risk and try your luck with altcoins. Many people who are entering the market with less capital are hoping that buying altcoins will bring them a higher return and allow them to make up for the lost time in the market. Even though losses could be higher. While others like to invest in Bitcoin or Ethereum. Projects that still have great potential and will most likely be around in ten years, but will often be slower movers than some altcoins. You need to make a decision of taking a more safe route or taking more of a gamble that could bring higher gains.
HODL or Trade
Another important decision each person in crypto needs to make is whether they will be a HODLer or a trader. Those who have been in crypto for a significant amount of time know that time in the market is all you need to be successful. Buy just buying Bitcoin or Ethereum and HOLDing for a significant amount of time you will have great success.
On the other hand, traders often have a shorter timeframe or are trying to make even higher profits. While it is true that traders can use the intense volatility of the cryptocurrency market to make large profits. But they can also lose it just as quickly. Again, you need to decide if you want to be an investor or a gambler.
Whether to Chase Yield
One of the most hyped areas of crypto during the last cycle was the yield that crypto holders could earn. It wasn’t unheard of to stake stablecoins for up to 20% and other tokens for much more. By staking, providing liquidity, loaning out your crypto, and several other methods users could make amazing passive income. There were many stories of people who were earning so much with these methods that they quit their jobs.
But as we learned all too well last year, these great rewards also come with just as large risks. With the Luna/UST de-pegging, rug pulls, hacks, crypto lending companies becoming insolvent and freezing your funds. Some people learned the hard lesson that chasing these yields wasn’t worth the risk for them. However, there is no denying that if you can find a safe method, it could allow you to earn a great passive income and perhaps transform your portfolio into something special.
Taking Self-Custody or Trusting 3rd Party Services
Again, this is something that many of us learned the hard way in 2022. Either we were chasing yields on lending services or exchanges, were too lazy to take self-custody, or didn’t want to spend the money to buy our hardware device.
Whichever reason you have, those people who lost or had their funds frozen last year would likely give anything to be able to put their coins into self-custody now. The one-time purchase price of self-custody hardware seems very cheap now. It is always better to be proactive and imagine the worst possible scenario happening. This will help you to avoid heartbreak in the future.
When to Sell
The final decision that everyone in the cryptocurrency market will need to decide is when to sell. As I mentioned earlier, often is the combination of buying the right coins and time in the market that will determine your success. It is often said that you can have great gains in your 1st cycle, become rich in your 2nd cycle, and become wealthy in your 3rd crypto cycle.
It takes a lot of patience and willpower not to sell during your 1st cycle when you could use that money to pay off debt, or buy things that you have always been wanting. But, if you can hold off for a few cycles, you may never need to worry about money again. But, there is always the risk that prices will never recover or see new all-time high prices. That is the risk we take in this market.
How about you? What were the most important decisions you made in crypto?
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