10 Things Every Investor Should Know Before Getting Into Crypto

1.  Manage your expectations

The first thing that I wish I had known before coming into crypto is managing my expectations and being prepared for the long haul. When we have certain expectations in life, we get caught up in a dream, imagining what could happen, we tend to get carried away with the glory before doing the hard work. It's a bit like when we were kids and we were playing football. Just before taking a free-kick or penalty and you're about to score a goal. You start to imagine your name glittering in big bright lights and the crowd roaring, but you miss the opportunity and reality hits. So, you sense the glory before actually doing the part. It's important in crypto to manage as well. When we first come into crypto, we hear about people making massive gains, we start to imagine our name flashing in big bright lights of glory and think: "If, I get bitcoin or if I get an altcoin now, then in six months I'll be a multi-millionaire". It doesn't work like that. It's life. We have to be realistic. And having that realism by managing our expectations is important because it keeps us grounded and it prevents us from making rash decisions like always pursuing some quick rich scheme or chasing an investment.

So, managing expectations is to be clinical and think before going on this journey, about what can you can realistically make from an investment and by when. What are the advantages and disadvantages? So, when someone comes into the crypto space, most of us invest in large market cap cryptocurrencies like Bitcoin first or Ethereum. Understanding and managing expectations are also linked to understanding how the market works. So, bitcoin's market cap is already huge, even though it's been at its lowest market cap for a while now. But how many Xs can it go in a particular cycle? We know, for example, that it went as low as $17,700 over the last week and its all-time high, $69,000. But the point is that if we buy bitcoin, how much of this bitcoin, and how many SATS are we going to stack? Also, understanding what would be the all-time high, to understand that we're not going to be billionaires or even multi-millionaires from one cycle just by buying, half a bitcoin. It just doesn't work like that because statistically the crypto market cap would have to explode in unprecedented ways for that to happen. Things take time to mature. This is why managing my expectations from that personal sense was very important too. Although of course, what took me and what convinced me about bitcoin were two factors. The first factor was the scarcity of bitcoin and the narrative that many institutional investors are thinking about this now was what led be to buy my first bitcoin. So, it's important to manage our expectations, to understand that we will not get rapidly rich from a decent investment in one cycle. It just doesn't work like that.

2. Avoid scams

Many of us in the crypto space, whether we're old school or new, whether we're newbies, inexperienced, no Coiners who are still coming into the space, or people who have been around for some time, every single one of us have been victims for some type of scam. We've been either rugged. And the thing that I wish I knew or had this awareness of is understanding how scams work and not having trust. Because sometimes what happens is when we see tweets like this or we see projects like this, we think of point number one, getting rich quick. So, when we think about getting rich quick, it plays to our greed psychology. We want to grow our portfolio as quickly as possible. We hear about mad gains and we get scammed chasing projects that are too good to be true, but it plays on our greed psychology so we end up getting scammed by rug pulls.

What are "rug pulls"? A rug pull is a sort of crypto fraud where a team pumps their project's token before fleeing with the funds, leaving their investors with a worthless asset.

Many of us have been rugged, and I'm a rug survivor and I'm sure every single one of you is rug survivor too.

3. Get as many as you can?

Don’t spread yourselves too thin. From my personal experience, and if you even listen to some of our pet podcast episodes in the past, and you saw what was in our portfolio when, Oz and I, discussed this, and some of you made comments like, “guys, you need to manage your portfolios a bit better”. It’s true because having 50 - 100 different crypto coins or tokens in a portfolio is insane. It doesn't make sense. It doesn't make sense if you're spreading yourself too thin it’s like spreading a little piece of butter on a big piece of bread. It doesn't cover everything. However, if you concentrate on more important key projects, and invest heavy in a few, you may gain more and manage better. In the past, I should have read about managing portfolios, concentrating on three or four projects from the top market caps, maybe one or two of the mids, and one or two very risky low ones and divided in that way. For example, 70% on top projects, 20% on good decent mid-caps with potential, which I will come on to good fundamental research, which will come onto one of the parts, and 10% possibly on these riskier low caps. That's what I should have done it in my early crypto days. So, this is what I should have done looking back at and I wish I knew about managing portfolios before coming into crypto.

4. Learning the basics of Fundamental Analysis

So, there are two points here. First of all, learning about fundamentals. Learning about fundamentals is essential before investing in project and this avoids us from getting shilled or worse rugged. Learning the basics of fundamental analysis (FA) such as what the emerging technology of a project is. Who are the backers? Tokentomics, on-chain metrics, the team, venture capitalists, etc. You all know my position recently on VCs, I don't trust many of them. There’s a vested interest in these projects, massive seed holders, and the unlock schedules are unrealistic. In a sense that okay, if something moons to a 50 X when it first comes out and they're only giving you, for example, 2% every single month and the project dies after six months, then is it your investment? That's just the reality of it. It’s essential to understand FA and doing your own research.

5. Learning basics of Technical Analysis

I used to think technical analysis is a bit too much and I won't be able to understand it. I felt daunted by the whole aspect of understanding technical analysis. I mean, for anybody who is in crypto, it's very important to understand how the markets work. And this is more of a late realization for me. I mean, to understand at least some fundamental indicators about On Balance Volume, support and resistance, accumulation, distribution, moving averages is extremely important to understand and be able to at least read a chart because if that's the case, then we wouldn't know when is a suitable time to buy and when is an appropriate time to sell, when it is important, when is a suitable time to accumulate and distribute. Looking at volume as well, funding these types of indicators is very important, at least from a basic perspective and goes harder and becomes more serious. When we do become a bit more confident in understanding and having a deeper understanding of technical analysis, just like fundamental analysis. Because we see, for example, on social media, we see many people who are good at fundamentals, who claim to be fundamental analysis experts and so forth. And we get a lot of chart people as well. And not to say that anybody who claims to be a fundamental analysis expert or TA expert, they are an expert. A lot of people do mistakes, make mistakes, through trial-and-error procedures. So, in that same sense, very, very important for us to have an understanding of myself, to have learned about technical analysis way, way back, and not just to have the mentality, okay, it's difficult, it's not my strength, I don't like charts and patterns and this type of technical readings and things like that. I rather research from a literature perspective and understand the fundamentals of emerging technology teams and things like that. No, we need to be all-rounders in this game. And I'm realizing that it's important for us or everybody serious about crypto to be all around us and have a balance of fundamental and technical analysis and go deeper in reading and learning about the markets.

6. Taking our profits

This is one the most difficult ones. It doesn't matter if you've been in crypto for five days, five months or five years. We always seem to have issues when it comes to developing a strategy taking out profits. Sometimes it's okay to periodically take out profits. When there is an uptrend in the market a profit is a profit, it's not a loss. But sometimes we treat crypto investments as losses as it's only done a three or five X, and not the ten X or 15 or 20 X. We think, what, this is a loss? No, it's free, it's a five X. Take out your initial if you want to take it all out, if you believe the coin has no future, the project has no future, take out your profits!

Personally, taking our profit is the trickiest. Recently, taking out profits has been an issue going back to late November 2021 and the crash because since the month preceding October going on to November, these two or three months should have been the profit-taking areas. Not on the downtrend from December, then January, February, March, April, and a lot of people will be taking their profits on the downtrend, which shouldn't be the case.

It's building our strategy and understanding the uptrend. And for me, to apply this much better before coming into crypto, to have understood this and to ask anybody who's been in crypto, how do they take our profits? Try to apply it, and look at the charts. So never forget to take out profits on an uptrend.

7. Blocking the noise

What do I mean by keeping out the noise? Social media influencers shilling projects and coins on YouTube and Crypto Twitter. People talking about projects, people saying this is a fantastic token is the next Ethereum, the next Polkadot, the new Doge coin, and you can make billions off of them. I’m not pointing my finger at influencers; I am saying we need to take our own responsibility and not get sucked into a hype. When I came new into crypto I should have blocked out the noise. A lot of the influencers have made massive ROIs and good on them for making profits and it's not their responsibility to do your research for you. We all have minds, and we all can distinguish what is good and what is risky and what is worth it and what's not. We all have our means, we all have our risk tolerance levels.

So for me, there are certain things which are good that I would look into. But what I decided to do is just unfollow many people who I wouldn’t miss and would have no benefit to my crypto journey and my investments. I'm not saying these people are bad, and I'm not criticizing everything they do and I'm not blaming them for any losses I made. I took the risk. I didn't read about projects, I listened to the moon-boy talk and I made mistakes. So I decided to keep out the noise and then developed my own strategy. So, I should have looked at who I'm following, their track record, are they bringing any benefit to my Twitter. And at one stage I unfollowed so many people and periodically I just check who was worth following and who was not because it was noise, background noise, I didn't need that. And this is the reason why I wish I had known before coming into crypto is blocking out the noise. Not everybody that you listen to on social media or YouTube or Twitter or whatever is an expert. Everybody has a vested interest in some shape or form. This is just a reality. So it was important for me to block out the noise.

8. Question everything and everyone

If it's a glossy white paper with a lot of technical jargon, question it. Read the white paper, read the fundamentals, read the VCs reputation. Check your Twitter influencer, your listeners. This is what I should have done. I didn't really make that much of a mistake in these things but yeah, it still applies because sometimes the people who are the most experiencing crypto, we still do mistakes, we still make mistakes like in life, we always make mistakes like this. So, I question everyone and everything. And for you listeners, you should be questioning what I'm saying in a sense as well or crypto unplugged or any other influencer or social media channel or YouTube or whatever because when it comes down to the crux of the matter is that we are responsible for our actions and our losses and gains.

9. Your strategy works for you

What do I mean by strategy? Investing without a plan is asking for trouble. Think about what you want to achieve in crypto? Do we want to change the world? Do we want to make money and get rich quick? Do we want both? Do we want to leave our full-time jobs and go into full-time crypto? It depends what our reasons for coming into crypto are. For me is getting out of a rat race and getting out of a field that I particularly didn't like in the latter part of my career and having financial freedom and liking what I do. So, this was the reason for coming into crypto and having as a greater objective financial freedom and getting rich and having wealth. Now obviously these are a lot of things all into one, but step by step is by redefining that strategy.

10. Be prepared to wait

The final point on this list is to be patient. Don't think you will get your financial freedom just by investing in a few altcoin gems and then running off into the sunset with your shiny knew Lambo. Most investors in the space go through 2-3 cycles to get to a level where they achieve their financial freedom. It's a long game and be prepared to play the long game.