Cryptocurrencies can be super lucrative and life-changing to invest in. However, a bad decision can cost you everything you have worked for. One investor now regrets some of the choices he made after raking in more than $50,000 during the 2017/2018 Bitcoin bull run.
According to the investor’s confession on Confession, during the Bitcoin surge, he cashed out but found himself back at square one year later. The investor says that after he sold his Bitcoin stash, he took some time to travel the world. He went from country to country, living the life most crypto investors dream about.
Living with Regret A Few Years Later
Today, the investor is 33 and back, living with his parents. “I’ve made some bad life choices, man,” he said, acknowledging that he quickly ran out of money without reinvesting or securing a stable financial future.
He is now trying to make a living by scalping 125x leverage perpetual futures, a dangerous operation that raises the stakes to win big in the highly volatile crypto market.
The investor also said he’s “just trying to make enough to move out,” emphasizing that his current lifestyle is far from ideal. The quick shooting up and plummeting of his finances may just be the lesson on a silver platter for many aspiring traders’ dreams of hitting the big time with cryptocurrency.
Tips to Avoid Making Bad Decisions as an Investor or Trader
This kind of story tries to drive home the reality of crypto and the need to make calculated, informed decisions. With that said, here are some basic tips on avoiding similar pitfalls!
1. Beware of High Leverage
Quick profits through high-leverage trading are always alluring, but it’s also two-edged. For instance, 125x-leveraged trading will boost your returns upside, but it will further amplify the risks. If you make one wrong move, you may lose everything. Again, crypto trading or investment should be treated with clear strategies and risk management before investing money or other investments.
2. Diversify Your Investments and Income
The investor confessed that he spent most of the money traveling the world. This was a big mistake for him as he used up all his profits without diversifying his portfolio or creating additional income streams. You cannot depend on one windfall in the highly volatile crypto space.
3. Avoid Succumbing to Lifestyle Inflation
Once you make your big win in crypto, avoid the tendency to upgrade your lifestyle in a big way. If you are not careful with your funds, your portfolio will dissipate quickly. You need to strike a balance between enjoying your earnings and preparing for the uncertainty that may arise in the future.
4. Plan for Long-Term Stability
This investor’s story essentially teaches the importance of long-term planning. If he had allocated part of his profits to safer and longer-term investments, today, his financial situation could be very different. Always secure your future first, even when things are going well.
Caution for Crypto Traders and Investors
The investor’s journey epitomizes most traders’ pitfalls: getting caught up in temporary success and even failing to consider long-term implications. This experience comes as a rude awakening that financial freedom has little to do with making money. Rather, it is all about how well you can manage your money.
To be successful as a crypto investor or trader, you need discipline, planning, and clarity around risk. While the cryptocurrency market is uncertain, it presents some amazing opportunities. However, if you rush in without careful consideration, you may find yourself facing more regrets than rewards.
This news is republished from another source. You can check the original article here