The crypto and financial spaces are filled with people who claim they have the best strategies for you to make the best out of every single market condition: Youtubers and tiktokers uploading “Top 5 moonshot” videos on a daily basis, TA “experts” claiming they can read the future and Twitter influencers shilling the latest established coin “killer”, anyhow, its the wild west out there, and in that crowded space it is tough to filter all the noise and find valuable opinions.
It takes a while to find out who’s a charlatan and who really adds value to their content, after two years in crypto I think I have enough bagage to know who belongs to which camp... but listening to advice (or NOT FINANCIAL ADVICE) and applying it are two different things.
Thanks to the gift of hindsight I can now share with you five examples of great pieces of advice I wish I hadn’t ignored:
This is a common phrase used by Benjamin Cowen of Into the Cryptoverse and most experienced people in markets, really. Coming from the mining community, channels like Brandon Coin also mentioned the importance of DCAing out of Crypto as a good strategy to avoid massive loss of value in our portfolios.
Why I ignored it: As a newbie in the crypto scene and investing in general I got caught up in greed and how quick gains happened during the 2021 bull market. Selling any coin while the markets were green seemed just plain stupid
The Outcome: I missed the opportunity to take good profits in most of the holdings I had, probably the worst example in my portfolio was Kadena ($KDA) which I had bought just below 3 USD and watched it rise to an ATH of almost 25 USD to only to later watch my paper gains burn in flames as the price just kept falling off a cliff.
2. Sell your GPUs before the ETH merge.
A few months before the ETH migrated its consensus mechanism from Proof of Work to Proof of Stake, a Bitpro article about post merge profitability was featured and discussed in various mining channels, including Red Panda Mining and Rabid Mining. The article revealed that the daily revenue of all other mineable coins available at the time would be insufficient to keep GPU mining profitable, the amount of hashrate that was gonna migrate from ETH to their networks would create massive spikes in difficulty and only an equally massive spike in the coins’ price could save profitability. The scenario was terrible and a fair advice was to sell one’s GPUs while demand for them in the last days of mineable ETH still existed.
Why I ignored it: A few reasons: The ETH merge had been delayed so many times that I had the feeling that it could be further postponed into 2023, I also believed my electric rate (9 cts. Kw/h) would be enough to keep me afloat during the first post-merge months while most miners with higher rates dropped out of networks, but mostly I ignored the straight facts because of an emotional factor, I got into crypto early 2021 through GPU mining, all of my hardware had already hit the breakeven threshold and I felt an emotional attachment to the practice of crypto mining.
The outcome: As the article predicted, all mineable coins post ETH merge had a difficult spike that rendered them unprofitable to mine, I tried supporting networks of projects I like, like Flux and Ergo while spec mining other coins like Meowcoin for a couple months but the writing was on the wall and I had to turn my whole operation off and I finally ended up selling my older generation GPUs for 40% the price I could have sold them just days before the merge. I kept my Nvidia 30 series cards and I’m currently spec mining other coins (more on that in the next posts)
3. Always keep some stablecoins aside for buying opportunities.
Now this is a tip I didn’t get from any articles or influencers but from crypto OG’s I had met in the process of educating myself in blockchain. Most, if not all of them, told me that even though HODLing an asset could be a long term move, I should also allocate some percentage of my portfolio in stables, because when markets crash (and they inevitably do) you will be able to scoop up cheap tokens and increase your crypto bags.
Why I ignored it: I was too much of a HODL dude, and like I explained In the first point, I was so bullish and greedy on crypto I thought a crash would never happen.
The outcome: Of course the markets crashed, and when they did all I could do was wish I had some stables set aside to scoop up some cheap tokens, all I could do was sit on the sidelines and see how my portfolio kept bleeding, day in and day out.
4. Avoid Pool 2s in yield farming
I got into DeFi when Ethermine allowed ETH mining profits to be paid out in the polygon network, being a small miner ETH fees were prohibitive for me to try any Uniswap degen plays or participate in Liquidity pools but with Polygon’s fees costing less than a cent, I decided to give it a go. I had read from different sources, like this Degenomics interview that the best way to provide liquidity is through a stable pair or a Pool 1 pair (meaning you have no exposure to the DEX governance token you get paid on as a reward for proving liquidity) and I should avoid Pool 2 pairs (Meaning one of the two coins you are exposed to IS the DEX token you receive as reward for providing liquidity)
Why I ignored it: Well, at the time I got into Liquidity pools, Dinoswap had just launched to Polygon. The platform offered a few liquidity pools, APYs for stable pairs and Pool 1 pairs were decent but APYs for Pool 2 pairs were insane, three-digit interests on my ETH sounded great, the first few days I was earning more with 800 bucks worth of ETH in that pool than what some of my rigs were earning daily, but of course, that was only temporary…
The outcome: I woke up one day and the DEX token ($Dino) had taken a massive nose dive, I lost around 60% of the money I had invested in the pool and decided to say the hell with the sunk cost fallacy, took the L and just call it quits, I was lucky to get some money back before the token went to basically zero.
5.Have a strategy and stick to it
Ok, this is some basic investment advice. Like literally the first thing ANYONE will tell you when you start investing in stock, real estate, bonds, or any other thing.
Why I ignored it: Most of my investments are long term holds like Real Estate and local bank shares I’ve had since I was 15, so since I had no experience in investing in volatile markets previous to Crypto I thought I would have some time to decide what to do with the profits I was earning from Mining, DeFi (when I learned how not to lose money) and node running.
The outcome: I spent most of 2021 and 2022 just juggling different strategies and swapping tokens left and right, even though I’m still in the game, not having a clear strategy left me unarmed to feelings when decision making time arrives, so I have panic sold, FOMO’d, panic rebought and whatever you can imagine a crazy man with a phone at 4 AM can do.
This is no way to treat an investment and your future so I started 2023 with a clear plan and just stuck to it. I can honestly say it has saved me a lot of pain and has allowed me to sleep better.
Conclusion
Information is power, that’s why being on top of all news regarding our investments is a must, however if you decide to ignore the facts and let your emotions fill you with hopium you will not put that information into specific actions that will, in the end, help you stay alive in such volatile markets.
At the same time, I try not to be so hard on myself, like my old man says, you can’t learn on other people's experience, so getting rekt it’s part of the process; So, I’m glad I can share some of my learnings through this post but I also know, you will probably have to get rekt yourself a few times before coming to similar conclusions. Have fun ignoring them for now and thanks for reading this far!!
