If you want to survive the extremely volatile and heavily manipulated crypto market, you have to invest intentionally and follow some basic rules that guide us.
In this post, I would be sharing with you 17 simple but golden rules of crypto investing that will help you stay on top of your game at all times.
If you follow these rules, you are sure of not just surviving the crypto market, you will be a profitable investor, and immune to lousy mistakes that could cost you your precious coins.
Top 17 simple but golden rules of crypto investing
Below are the 17 golden rules of crypto investing in no particular order.
These rules of crypto investing are there to help you avoid losing your coins to scammers and maximise your profitability.
- Invest intentionally
- Never invest more than you can afford
- Never sell your crypto (too easily)
- Never go all-in or all-out on a project
- Double-check everything
- Don’t take “financial advice” from strangers on the internet
- Avoid active trading
- Avoid the Ethereum mainchain
- Always verify from multiple sources
- Have your own personal crypto investing plans and strategies and stick to them
- Never sell at a loss
- Keep a portion of your portfolio in stablecoins
- Diversify your portfolio
- Never stop learning and growing
- Don’t invest based on your emotions
- Never regret taking profit even if the price keeps going up
- Don’t ignore your country’s law(s) on crypto
Let’s briefly discuss each of them below.
1. Invest intentionally
Invest mostly (only) in projects that you believe in their mission and growth potential.
This implies that you need to know exactly why you’re investing in this project and what you expect from the investment.
To do this effectively, you will need to do your own research (DYOR) and learn how to perform a fundamental analysis of a project.
Investing intentionally gives the required courage to HODL for as long as it takes.
Because you know that as long as your reasons for investing (fundamentals) remain intact, you will be confident in your investment, regardless of the current market situation.
Diamond hands don’t forge themselves. They are forged by fact-based confidence that you’re holding on to something special.
So that when the FUDs come, you just smile and buy the [email protected] dip 🙂
2. Never invest more than you can afford.
There’s a classic saying among (crypto) investors, “never invest more than you’re willing to lose”.
We say this to ensure that we invest responsibly without putting our livelihood on the line.
But I don’t operate by that, because I’m not “willing” to lose anything.
What I am willing to do is invest only as much as I can afford now.
And that means, investing within my budget, and not buying crypto with the money I need for my short-term bills.
This is because, the crypto game is best played long term, and you need to invest money you will NOT need for a fairly long time (1 to 10 years).
If you’re forced to liquidate your crypto too early, you’ll most likely be taking a loss.
Plus, holding is easier when you invest money you wouldn’t need anytime soon.
Furthermore, investing more than you can afford will force you to consider the get-rich-quick options, which we all know, almost always never ends well.
3. Never sell your crypto (too easily)
If you have no emergency need for cash, you have no business selling your crypto assets.
And even then, selling your crypto assets should be the last resort. Remember, there are ways you can spend your crypto without selling it.
The reason is that your crypto is more than just money in your savings account, it’s a yield-bearing asset.
You don’t just sell your land or house just because the price has increased or you feel itchy to hold cash, do you?
The same thing applies to your crypto. You only liquidate when absolutely necessary or you have achieved your target.
4. Never go all-in or all-out on a project
It’s nearly impossible to catch and buy the bottom of a dip or sell the top of a pump.
That’s why dollar-cost averaging (DCA) in and out is always the best way to go.
If you have $1000 to invest in a project for example, first, it’s good you don’t invest it all at once.
It’s wiser to divide the money into (say 4 or 5) different parts and buy-in at regular intervals until you’ve exhausted the whole amount.
This is because the market could keep going down after you’ve bought. And if you had used all your funds in the first purchase, you would not be able to take advantage of the new lower price.
Of course, it could also pump straight up after you’ve bought and you would miss getting a bigger profit.
But it’s better to make a smaller profit than lose a portion of your capital, right?
The same applies to selling. Since it’s not possible to catch and sell the top of a pump, it’s best to sell in instalments.
DCA in when buying, DCA out when selling. That’s the best and less risky way to buy and sell your coins.
5. Double-check everything
When sending money from one wallet to another, ensure to double-check the wallet address (if possible, send a test transaction first) to be sure.
Also, remember to enter the correct memo or destination tag where it’s required.
Yes, some coins like Ripple (XRP), Electroneum (ETN), EOS 9EOS), Stellar Lumens (XLM), etc, require what’s called a memo tag.
Furthermore, since most coins are now on multiple chains, make sure you’re sending the right coin to the right chain.
Verify everything twice before clicking that SEND button, because if you made a mistake, the transaction can’t be reversed and your money could be lost forever.
6. Don’t take “financial advice” from strangers on the internet
Everything you hear and read online is for information purposes only, not “financial advice”.
You’re to digest it and use it to make informed and independent crypto investment decisions.
Nothing anyone says on the internet or even in real life should be taken as “financial advice”.
You alone are fully responsible for your investment decisions and actions.
7. Avoid active trading
Except you’re a professional trader, you have no business with trading.
It is the easiest and fastest way to lose all your money. By all means, do not trade.
But if you must, I suggest you consider using my degen trading strategy and position trading strategy.
Both are very similar and are the only trading strategies I would recommend for a non-professional trader.
8. Avoid the Ethereum mainchain
If you want to keep more of your profit, avoid using the Ethereum mainchain because of the extortive gas fees.
Except, of course, you have a significant amount of capital to work with which will make the fee insignificant for you.
Otherwise, I suggest you use Ethereum layer2 solutions and sidechains like Polygon and Arbitrum with super low fees.
Or better still, consider using alternative chains like Solana, Avalanche, smartBCH, etc, which all have negligible network fees.
9. Always verify from multiple sources
You may have heard the classic saying among we crypto enthusiasts, “don’t trust, verify”.
I want you to extend it further, verify from multiple sources”.
This is because the level of misinformation in crypto is alarming.
People make money from sensational stories, propaganda, lies, and false information, in one way or another.
So, before you invest your money based on what some random internet guy is talking about, verify from multiple sources.
Furthermore, when doing your own research (DYOR) on any project, use multiple sources. A single source is never sufficient to give you the true picture.
10. Have your own personal crypto investing plans and strategies and stick to them
The only thing worse than not having a personalized investment plan or strategy is not following them.
Investing without a plan is identical to gambling, even if you’re investing in the said solid projects.
You need to know the what, why, when, how, and where of your investment even before you put in the first $1.
This will give you a clear head at all times to stay above the volatility and market manipulations.
Otherwise, you will just be a toy of the market being tossed to and fro by every FUD (fear, uncertainty, and doubt) and FOMO (fear of missing out) that hits.
11. Never sell at a loss
You may have heard the saying, “you can’t lose if you don’t sell”, and that’s absolutely true.
Never sell any of your crypto assets at a loss, except you have determined that you mistakenly invested in a scam or a useless project and have to cut your losses.
12. Keep a portion of your portfolio in stablecoins
Always keep at least 5% to 25% of your portfolio in stablecoins.
You can park your stablecoins on a lending platform, earning interest while waiting for the ultimate bear market to buy the dip.
Even if a market crash never comes, it’s always a good idea to secure your trading and yield farming profits in a stable and secure asset that can also grow.
13. Diversify your portfolio
One important element to successful cryptocurrency investing or any kind of investment for that matter is having a rich and diversified portfolio.
It’s wise to invest your money in different coins, on different chains, and in different sectors of the crypto economy.
However, note that there’s such a thing as over-diversification.
If you’re investing with a tiny amount of capital, diversifying into too many projects can hurt you.
Click here to learn how to effectively diversify your cryptocurrency portfolio
14. Never stop learning and growing
The crypto market is not only volatile, but it’s also equally extremely dynamic. You need to stay up to date and evolve accordingly with the market.
Things change very fast in this market because it’s just developing and a lot of things are still experimental.
The innovation and competition here are extremely fierce.
And if you don’t stay up to date with the market, and especially the projects you’re invested in, you may wake up to discover that you’ve been left behind.
One way to stay constantly informed on what’s happening in the market is to join Join a community of passionate, knowledgeable, and like-minded crypto investors.
The CryptoSorted Telegram group is one such place to be. See you there soon.
Other places you can also find what’s currently happening in the crypto market include Twitter, Reddit, CryptoPanic, etc.
15. Don’t invest based on your emotions
The crypto market is controlled mostly by two emotions, fear and greed.
Make sure that none of your investment decisions is based on the overbearing influence of any of these two emotions.
It’s impossible to not have some level of fear or greed when dealing with your money.
But the point is not to allow these emotions to cloud your judgement.
Your investment decisions should be mostly based on data and facts and less on your “feelings”.
Click here to learn about the 5 important factors to consider before investing in any crypto
16. Never regret taking a profit even if the price keeps going up.
Sometimes when you have reached your profit target you need to sell and take profit and probably leave the original capital to keep working.
What happens is that sometimes, you feel a sense of loss when the price keeps going up after you have sold and taken your profit.
That’s the voice of greed talking to you.
Remember, there’s no way you could have known that the price will keep going up.
Plus you have reached your initial take profit target anyway, the further “gains” you missed could also have been a loss.
Never regret taking profit and learn to celebrate all your wins, no matter how small they are. That’s how to silence the voice of greed.
17. Don’t ignore your country’s law(s) on crypto
While some countries have outrightly banned crypto, some have adopted it as legal tender, and others have chosen to tax and regulate it.
Whatever your government’s stand on crypto is, never ignore it, and learn to play by the law.
Otherwise, you could go to jail or get your coins confiscated.
Ignorance is not an excuse either, so keep yourself informed.
Rules are there to keep us safe and provide clarity and focus in the heat of excitement.
In this post, we have discussed 17 simple but golden rules of crypto investing to live by to avoid losing your money and maximise your profitability.
Which is your favourite crypto investing rule(s), and what other crypto investing rules do you follow that’s been working for you so far? Share with us in the comments section below.