Crypto is a Scary Place Where You Can Lose Everything

Crypto can be a super scary place. What is going to happen to bitcoin, especially if you're working full time and crypto is a side hustle or a hobby. I've seen people single handedly lose millions of dollars from a simple security mistake. When I opened it up and started using it, it seemed legit as any of them. Strangers on the Internet that promise you massive financial returns if you let them manage your money are scammers.

Crypto is the wild wild west. And ensuring that you have the right security and the right safety and you're listening to the right people can be the difference between winning and losing. Going back a few years ago, we had one of our members who was setting up his own wallet and he was moving his cryptocurrency from an exchange to one of his wallets and in doing so, when he was writing down his 24 word phrase, he stored this temporarily on Google Drive. It wasn't there for long. He only had it there so he could save it and it went and deleted that from his Google Drive. But what he didn't know was that a hacker actually already knew that he had a ledger wallet. Because of the ledger hack, all their emails were distributed. So he knew that that guy had a ledger wal he somehow got into his Google Drive account and already had access to this. And although he deleted from his Google Drive into his deleted folder, that hacker went into his deleted folder not knowing that things are still stored for another 30 days online. So overnight he logged back in, checked his wallet and he'd lost everything forever. This is just one story of so many stories I see single handedly of people getting into crypto and being wiped out. Whether it be from their own mistakes of security, or putting investments on the likes of ftx, Celsius, blockfi and losing everything from exchanges, it can also happen from buying the wrong investments. I have another friend who was getting into crypto who was on Reddit. He's a smart guy and following people online and ended up buying a scam coin from these people on Reddit who were pumping up something, who were just doing a normal pump and dump that he wasn't even aware of. 90 to 95% of the tokens in cryptocurrency are actually worthless and so many of them are there just to take your money, scam you out of your money so they can be rich and then you can be poor. So crypto can be the wild west. It has the upside of making life changing amounts of money or the downside of losing everything Overnight, so. So I'm going to give you my framework that I've utilized over the last seven years that I share with all of our new members, especially new investors, to crypto on how to have a framework of not stuffing up and not losing money overnight. First of all, is to not overthink things. I believe having a simple strategy wins in crypto. And yes, you're going to listen to people online. There's going to be youtubers and influencers sharing all their tips, all their new coins. Everything that you should be doing, they're going to be telling you. But I recommend not listening to one person, even me. Right. I'd be recommending listening to other people and then sifting all that information and making your own decision. I think there's a really important lesson in just listening to one person online. I did that when I first started and I got led down the wrong path. This person had one viewpoint on the world, one viewpoint on how you should invest. And I didn't see the rest of the market. You've gotta have different touch points and you've got to have different lessons to bring yourself together and have that edge. Invest appropriately. But again, by listening to too many people, you can start to overthink things and start to complicate things. You try and get into trading, you're trying to do derivatives trading, you're trying to do airdrops, you're trying to do all this sort of stuff. I'd recommend just pulling it all back and having a simple strategy. The reason I say this is the bull markets are going to make the majority of your money in that 12 to 18 months after the bitcoin halving, which is coming up in April, that is the time we're going to make the most amount of money. If you're playing around, stuffing around with trading, doing NFTs and airdrops, and you're trying to do all this stuff that you're not really sure what you're doing. You're going to end up just reducing the amount of Ethereum or reducing the amount of Bitcoin, reducing the amount of crypto. You have to play around with all these different things and not actually get the upside of the bull market. I've seen in previous cycles, people do this and they get on the wrong side of the cycle. They're thinking the market's going to go down, they need to put more money in, but they're not buying in because the market keeps going up, waiting for it to pull back. There's never a gentleman's Entry in crypto, it's not as easy as just putting money in crypto and hoping for the best. Having a simple strategy, predominantly Bitcoin and Ethereum, and starting to diversify with some altcoins in your portfolio, I believe is the most simple strategy. Once you've got that set up in a centralized exchange, I'd recommend learning about security, getting a wallet, getting a ledger, getting a Trezor, and moving that crypto from an exchange onto your wallet. This is going to teach you about how to custody your crypto, how to be your own bank. Now, again, this might not be for everyone. You might feel safer having your money on a crypto exchange. And I'm not saying having your money on a crypto exchange isn't safe. It just adds a little bit of risk. As I've spoken about in other videos, crypto exchanges are not insured. If a crypto exchange gets hacked like FTX or Celsius, you lose all your money. But by moving it to a wallet like a ledger or Trezor, it keeps it safe within yourself and no one can get access to it. Unless, obviously, you share your 24 words, which I'd highly, highly recommend. Not saving them online and keeping them offline, and only for your eyes only. The next one is don't get fomo. I see so many people get emotional in crypto. They're checking their portfolio every day, they're looking at Twitter, they're waiting for a new, you know, a new project to invest into. And you start to get that fear of missing out. You hear friends talk about a coin that you don't have. You hear about a new altcoin, you hear about a new airdrop. You hear about all the great stories in crypto, but you very rarely hear the bad ones. And I see and talk to a lot of people that have lost a lot of money in crypto by getting that fomo. Chasing altcoins online, listening to influencers who are giving really, really bad advice about getting 20, 40, 50. Heck, I've even heard people buy 80 different altcoins in their portfolio. By having so many different cryptocurrencies in your portfolio, one, you're not going to have a clue what they all do. You're not going to be able to track any of them. You're not going to know when to sell any of them, and you don't even know which ones are valuable and which ones are not. If I see someone that has 80 old coins in their portfolio, it just screams to me that they've been Sucked into the fomo. Every time they hear a new coin, they want to have a piece of it. But rather than having 80 different tokens with a hundred dollars in each, I'd much rather have 10 or 20 tokens with a much higher percentage of my portfolio in or dollar value. So at least if those tokens actually return where I think they're going, I'm going to make decent returns. With a huge portfolio spread out with lower amounts, you're just minimizing the upside potential and maximizing the risk that you're actually not going to sell at the right time because you've just got too many to monitor. Another strategy that I've used to build up your crypto portfolio in a simple way is just by dollar cost averaging. It's a really simple but tried and true method of building up your portfolio over time. Seven years ago I was sharing a bunk bed with my brother back in Tasmania in Australia and basically had no money to my name. But over time, with any excess money I had from my, I was putting it all into crypto and building that up. If you can hold your crypto through these bull markets, it's where you really get asset capital growth again by trying to do trading and trying to leverage your capital in bear markets, you just add so much risk to your portfolio and ends up doing the reverse. The quicker you try and make money in crypto, I find the quicker you lose it. So by dollar cost averaging and building up those top assets, you can really start to find growth. So for us to really boil down the difference between you, where you're at right now and the success of crypto is I see so many people just getting in the way of themselves. They over complic, they're buying too many things, they don't have a strategy, they're being too emotional. Really sit down and map out your goals and your strategy. And we've done a video on this topic of exactly how to create your own strategy, which I highly recommend going and checking out, which breaks down step by step what you need to be thinking about to achieve the goals you want to do. What are your goals? What are the assets you want to buy? When are you going to get out? That sales strategy is also super important. I see so many people barrel into crypto and think of it like gambling. They're just throwing money at different stuff and just hoping something makes them life changing amounts of money. I think a lot of those times are done. Yes, you might have been able to do that in 2016, 2017, but as we head into 2024, this market is maturing, there's more and more people involved, there's more and more capital involved. It's going to become much more like the stock market to have a simple strategy, buying good sectors. I'll be looking at sectors like Defi, the gaming and Metaverse, layer ones, layer twos, Solana. I'll be looking at these different ecosystems and buying into these projects and having a little bit in each. Right. Diversify across, but have a strategy about that. And as we go into this bull market, as to opposed price starts to increase, have a strategy about what you're going to do. As you hear about new tokens, there's going to be new projects come up, there's going to be new airdrops you want to get a part of. Are you going to sell your Ethereum to get access to that? You're going to put in more money, more cash to buy these things. Start to think about all of these things in your strategy. Because what I see people do when they fail in bull markets is they don't have any of that thought about. And you go into a bull market, your portfolio is rising, everything's going up. Your Uber drivers talking about crypto, your mum and dad want to tell you that they're buying crypto. And what ends up happening is you get too emotional and you don't have that logical step by step process of when you're going to sell. So what happens is what's called a round trip. You run it all the way up and all the way down. You get to the top, you think it's going to go higher, you don't sell, the market starts to retrace, it goes down 10 or 20% and now you really don't want to sell because it was just worth a little bit more just before. It keeps going down. Now you're definitely not selling. You remember where it was priced before and now it's down 40% and you repeat that cycle. So understand this is a logical game and the more you're emotional and the more you put yourself in your own self's way, the more opportunity you're probably going to miss out on. So get a plan, figure out what you're going to do and don't be emotional. I speak to hundreds of crypto investors every single month and we have over a thousand members of crypto investors in our platform that I speak with very regularly. And there's a clear differentiation between the successful investors and the not successful investors. And it's not time. It's not IQ and it's not about how much money they have, it's about how they think about their portfolio. You could have a successful investor with $10,000 and you could have a very unsuccessful investor with $500,000. And actually that's probably one variable that I see sometimes money people have the poorer the decisions they make. So what is the variables of the successful investors? Well, for one, they understand their portfolio. They might have a spreadsheet, they might have their dashboard set up in our portfolio. They know exactly their percentages, they know their sectors and they've done the research behind the coins that they have. They've got a thesis. If I ask them why they're holding Solana or why they're holding a coin in the Deepin narrative or why they're holding an AI coin that could give me a thesis now, I may be right, it may be wrong, we don't know. But they've thought about it and they have the conviction behind it. The unsuccessful investors might have multiple wallets that they don't know where the coins are, they don't know what they're holding, they don't know what percentages, they don't know why they're holding something. They're just leaving it all up to someone else. And I think that is one difference between the winners and the losers is that they have confidence and they have the all their portfolio under wraps. They know exactly what they're doing. Number two is that they're not emotional. They don't see a new token that influencers post about and go chasing after it. If anything they think about it the opposite. Why are the reasons why they should not buy it? What are the downside risks? Why should someone sell this token? What are the other sides of all the positive that influencer might be talking about? They go deeper into questioning it a lot and I see this a lot of our members I might put out a post about a new investment I'm looking at and they'll pick it to pieces. Ben, have you looked at the token economics? I don't like this. I think there's too many VCs involved. You know, what about their competitors? They're competing with these other three projects. Have you thought about that? Their token supply. They've got a lot of lockup periods for their initial investors. Is that good or bad? They're being very concrete around their decision making and questioning around certain investments, not just chasing after it due to emotion and fomo. The third one is that they dollar cost average they're continuing to build up their portfolio and they know when to get in and out of assets. A lot of them have been buying in the bear market. When the market's been chopping sideways and they're building up their bitcoin and Ethereum, ready to rotate into altcoins at the right time. They understand how four year cycles work. That's another big one. They understand when bull markets are here, money is to be made and where bear markets are here, it's time to consolidate and actually sell your tokens before you get there. With bull markets they go in two phases. Phase one is when bitcoin starts to rally and it increases the market capitalization. And phase two is when altcoins start to rally, Bitcoin market capitalization comes out and altcoin starts to go. And the successful investors know when to ro rotate. They're not holding on to altcoins in a bear market hoping that the crypto gods give them value and they go up. They're rotating in and out at the right time. They're looking at the on chain data, they're looking at the sentiment data. They're relying on expert analysts to give them the right information to give them that edge and they reach out to services like us to get the right information. They're not just relying on influencers to give them information that the rest of the market is. They understand that 90% of this market loses money. So they understand to get in the 10% they've got to be getting information from investors and analysts that are not giving it to the 90%. To get to the top 10% of results, you've got to be listening to the top 10% of information. If you're listening to what everyone else is listening to, you're already behind. And that's one thing that they understand. And last but not least, they have a simple strategy. They're not over complicating it. They might have a long term holding, they've got a short term holding, but they're not doing crazy trading, especially to have a full time job or a family. They're not trying to rush things. They know things will play out and they're just being more sophisticated. They're thinking about this as a longer term gain. They're not going to try and make millions of dollars overnight and they're not risking all their portfolio on one altcoin. I spoke to a guy recently that has all of his capital in Cardano. He has over a million dollars in one token, doesn't own anything else. All in Cardano. Now for some people, that might be a great investment, high risk, high reward. But for most people that I find successful, they are diversifying, they are lowering the risk, and they're not putting all their eggs in one basket. So understanding your risk appetite, having that strategy and thinking about things as a longer term game rather than trying to make millions overnight, can be the difference between winning and losing. Now, if you're ready to be in the successful investors camp, I'd highly recommend checking out this video here, which I walk you through our 10 crypto investing strategy guide to help you win in this bull market. And if you're ready to take crypto investing seriously and get that edge this bull market, head over and check out my crypto research company, Collective Shift, and I'll see you on the next episode.