1) Investing in crypto is a speculation
Everybody can tell you that investing in crypto is the best investment that you can ever make. However, investing in the crypto market itself is not an investment, it is speculation. You speculate that prices go up, and this is definitely not certain.
This is also the reason why investing in crypto is so risky because the market is volatile, and you have no guaranteed return on your investment. Nevertheless, the history of crypto (Especially Bitcoin) has proven that the whole market has always been in an upwards trend but in a highly volatile way.
This is mainly the case because cryptocurrencies mostly have a limited number of coins that can ever be mined. The increasing popularity of crypto and the bitcoin halving causes eventually a shortage of coins, which increases the value of the coins available.
2) Buy and hold is the best way to invest
Everybody in the crypto scene talks about trading with cryptocurrencies, but this is only effective if you know what you are doing. Most day traders lose money because they don’t know what they are doing.
Day trading is also very time-consuming because you always have to stay up to date in order to make the perfect trade. The most exhausting thing about day trading in my opinion is that it is very emotional. You can lose money or make money, and in every situation, you feel either very well or terrible.
The picture below shows the emotional rollercoaster perfectly.
This rollercoaster of emotions can fuck up your brain, and you can eventually not sleep anymore because you are only thinking about your investments.
This is also a reason why buy and hold or “HODL” in the crypto slang, is the best way to invest in my opinion. You don’t waste time thinking about if you have made the right decision or waste a lot of time tracking all the current crypto prices.
You simply invest in coins you believe in, and after this you let time work for you. This process of finding the right coins to invest in takes some time, but as soon as you have found them, you can focus again on your main business or job.
3) You have to have the right mindset to succeed
If you don’t have the right mindset, you will most likely lose money in the crypto market. This is the reason why this blog is called stoiccryptoinvesting and not cryptoinvesting. Having the right mindset allows you to stay calm during hard times and not overly excited in good times.
The best philosophy that teaches you about all of this is stoicism. Stoicism has many useful mindset approaches, but one of the most important is to only worry about things you can control. If you practice this successfully, you automatically focus on things that you can control when you invest in crypto.
This means that you are focused on.
- Your investment plan
- What money to invest
- Earning more money
- Picking the right cryptocurrencies
- Learning more about crypto
4) The potential in crypto is huge
You have to remind yourself that crypto has a huge potential to increase in value. This vast possibility of crypto prices going up very high is also the reason why so many people started investing their hard-earned money in the crypto market.
There are a lot of people out there that invested money in the crypto market when bitcoin was below 1000 dollars and did not sell their coins. They have now made a ton of money by investing in crypto.
5) You need a plan to succeed in crypto
You have to have some kind of plan when you invest in crypto. This plan can simply be to buy one coin and wait 5-10 years and sell after the time has passed. The problem that most people have is that they just invest in crypto and are immediately emotionally hooked to every gain or loss they make.
This causes them to be overly emotional about their investment and tend to invest way too much money in the hype or leave the market when the value of their coin dropped significantly. Instead, you have to think like the stoics that you should only focus on what you can control. Since you can’t control the market, you should control yourself to not get too emotional and waste too much time.
So create your investment plan and stick to it.
6) Invest in cryptocurrencies that plan to stay
There are a lot of small coins (altcoins) that are scams and over-promise. On the other side, there are also coins that are good, but the likelihood of them succeeding is very low.
The coins that are the most likely to stay are the coins that plan to stay here for a very long time and actually don’t just say they are going to stay, but actually plan and show the results of a coin that stays long.
One example of a coin like this is Cardano (ADA). The founder Charles Hoskinson is not really interested in the price of Cardano, but he is interested in the use case of Cardano. His goal is that Cardano is going to revolutionize the financial system and is therefore here to stay.
The exact opposite of cardano (ADA) is dogecoin. Dogecoin is simply a meme coin that got built for fun. It has no real use case besides being funny and only experienced a huge increase in value because Elon Musk Tweeted about dogecoin.
Dogecoin is therefore unlikely to be around in 10 years and this makes it a bad long-term investment.
7) Don’t invest money you require to live
Something I have seen a lot is that people start investing money that they either require to live or that they should not lose.
Remember! Only invest money in crypto that you can lose. This is vitally important. As soon as you invest money that you require to live, you give up control. This is not what we want to achieve, especially not since we take stoicism as a philosophy for investing. Stoicism talks a lot about the importance of always staying under control and putting your focus on the things you can control.