Navigating Crypto as a Beginner #1: F**k the FOMO in 2023

Some steps for what NOT to do if you're looking to get into Crypto.

Jan 20, 2023

Hey you. You’re finally awake.

If you’re reading this the likelihood is that you’ve recently stumbled across the world of crypto. Maybe you’ve seen some wild headline about Bitcoin hitting new all-time highs, recently watched a series or film which referenced a crypto trend or meme, or perhaps you feel like the current financial system isn’t working for you and you’re seeking an alternative.

Whatever your reason, welcome to the big, beautiful world of cryptocurrency, I’m here to extend a sweaty handshake and show you around. I know you’ll likely be here in the hopes of Lambos, yachts, and 1000x gains. I’m hoping you stay for the tech, culture, and original libertarian Cypherpunk vision from which it arose.

As someone who is still (relatively) new to crypto, my wounds from the beginner’s trials are still ripe but healing nicely, I’m still standing and have leveled up in the process. While it’s fresh I’m here to share some of the pitfalls which I dove straight into when I got started to help you avoid similar mistakes yourself. There is plenty for us to reflect on, feel free to drop your judgment in the comments.

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I made the mistakes, so you don’t have to… you’re welcome.

If you make one investment in crypto, the likelihood is that you’ll make another. It’s human nature. You might be one of the few fortunate enough to invest at exactly the right moment, make some quick gains and your portfolio dashboard is beaming in that addictive fluorescent green. You’ll think to yourself ‘shit, this is easy…’ and that you’ve mastered the art of printing your own money.

The alternative, and significantly more likely outcome, is that you immediately make a loss and want to try and get your money back with a ‘better trade’ at more favourable prices, instead of cutting your losses. The latter relates to the Gamblers Fallacy; having the assumption that things will eventually go in the direction you want if you invest enough time and money, prices can only go so low, right?

Ignore my cynicism, it’s only because I’ve been there and made the same mistakes and assumptions about the crypto market. I promise if you’re new to crypto, and especially if you have no previous trading experience (I didn’t), it will be incredibly difficult to predict the direction the market is going to move in.

The good news is, I’ve broken down some simple steps below to support you in making some better and more rational decisions when getting started with crypto. I’m not a financial advisor in any capacity and this isn’t a guide on how to make money investing, the aim is to educate people about the risks of being a complete degenerate using anecdotal references.

Firstly though, I’m going to lead into this with an ask – if you take nothing else away from reading this, just remember one thing… you CANNOT do enough research about crypto. As magical as many of the technological innovations are in the Web3 world, the space is unfortunately riddled with cockroaches and scammers due to the abundance of money and wealth which has been drawn in over the years. So whatever you believe to be an adequate amount of time spent researching, double it.

Step 1: Uninstall Coinbase and step away from the smartphone

This first step is the simplest, and I think most effective, but it’ll probably piss you off… the best thing you can do when getting started - is to stop, and take some time to do some due diligence. I know, I know, I can hear your groans of frustration, but just hear me out.

The reason it’s so important to do this early on is that it’s so easy to be drawn into the hype by crypto-bros flaunting their unlimited gains and lavish lifestyle on social media. I can promise that if you invest in something you don’t fully understand, you’ll be put off and frustrated when (not if) you lose money – I’d like you to be able to avoid this.

Before even considering how you distribute your hard-earned money in crypto, it’s a good idea to set some expectations and rules to follow first. This will allow you to keep yourself accountable and your investments safe. You can review these on a regular basis as you learn more and grow your portfolio.

You can think about what is best for you, but I’ve included some ideas below to help you get started;

Assume everything eventually goes to zero
If you get used to defaulting to this it means you can guarantee you won’t invest more than you can afford to lose.
Lower your time preference and ‘zoom out’
Consider a long-time horizon of at least 5-10 years.
Consider the macroeconomic backdrop
Like any other speculative asset, Cryptocurrencies are at least somewhat correlated to world events which impact their price volatility, keep an eye on any potential regulatory changes, the geopolitical landscape, and also how stocks and central bank-issued currencies are performing.
Don’t forget to take profits
It sounds obvious, but you would be surprised how many people have ridden gains to all-time highs and all the way back down. At the very least, for any investments which you consider to be short-term, set up some sell and stop-loss orders with the exchange you’re using, this means you have peace of mind you shouldn’t be caught off guard by any nasty surprises and also capture any upside opportunities.
Use a Hardware Wallet
This ensures your investments remain secure and only you have access to them. It’s surprisingly easy to fuck up self-custody of your assets - mostly due to ignorance or naivety - so please also remember the following:
1. Never store your unique seed phrase on a device connected to the internet
2. Never connect your cold storage wallet to a smart contract or application, if you need to do this use a disposable hot wallet (connected to the internet) which you can easily transfer funds or digital assets immediately
3. Only ever buy a hard wallet from the manufacturer themselves, it doesn’t matter whether you see a good deal on a third-party website as a device can be easily compromised
See which are the best hard wallets for you by checking out this video from the Coin Bureau (an amazing channel to follow btw).
Don’t gamble or FOMO
If you feel the itch, resist for 24 hours and come back to it and reassess your interest and whether you’re comfortable with the risk/reward ratio. Never take out a loan or use another person’s money to invest, regardless of how obvious an investment you think it is.
Default to skepticism
Assume everyone is out to scam you. Ignore messages on Twitter, never click unfamiliar links and never share or brag about how much crypto you have publicly.

Step 2: Don’t half-arse your research

Sometimes it doesn’t matter how strategically we time the market to get in at the lowest price point, there are many other contributors which impact the performance of assets. However, you give yourself the best chance by fully understanding the projects and protocols that you put your money into.

I fully believe, unless you mess about gambling and leverage, you have an incredible opportunity to invest in assets that will have a higher value in 5-10 years than they do today. Many compare the current crypto bear market to the dot-com boom and bust at the beginning of the noughties - the companies that survived the purge at the time ended up becoming trillion-dollar behemoths and revolutionized the lives of 7 billion people. Crypto, or rather the cryptographic blockchain technology from which it was created, will be the foundation for the third generation of the internet - also known as Web3 - and it could have an even greater impact.

Image Source: https://chaindebrief.com/cryptocurrency-adoption-curve-is-the-fastest-in-human-history

It sounds so simple when it’s put that way, but how many people do you know that guessed Amazon or Google were going to be the trailblazers in innovation at the turn of the century? On reflection, it’s glaringly obvious, but the challenge is understanding how to identify projects which have the potential for significant growth and staying power today.

I’ve outlined some questions for you to ask yourself when you’re looking into crypto protocols and what considerations to keep in mind when you’re researching:

Why does it exist and is it solving a real-world problem?
It’s a common misconception that cryptocurrencies are just more volatile digital variations of cash. There are many genres of crypto that vary in how they work and what they actually do.
Who is the team behind the project?
Depending on the type of asset you’re looking into, how the development team engages with their community can be incredibly telling and indicative of their future success. There is no such thing as too much transparency, but if there is very little engagement you need to ask why this is.
What are the Tokenomics of the coin or token?
If you’re unsure of the concept of tokenomics and how this affects the price of a cryptocurrency I’d recommend starting here for some basics. In a nutshell, the allocation, distribution, and day-to-day use case of a cryptocurrency have a massive impact on how its price moves over time.
What is the community like?
Although an often-overlooked factor, the community or following of projects plays a significant role in their success. Negative or toxic communities can sometimes be the downfall of projects which do everything right.
Will it be impacted by tough regulation?
This is an especially hot topic in 2023 as it’s very likely there will be a widespread crackdown on crypto, look to see if the company responsible for developing the project is creating an expectation of profit with their coin or token. If this is the case, they are most likely going to be impacted hard by securities regulation.

Step 3: Fundamentals before speculation

It’s next to impossible to understand how an asset should be fairly valued just by looking at the price history. If you don’t know what the underlying coin or token does, or why it exists, then I think it’s a fair assumption that you’re not ready to invest in it.

Contrary to what is shared by the MSM, there are a lot of coins and tokens which are actually fundamentally useful and by extension, valuable. The tech is truly groundbreaking and whether the boomers like it or not, Web3 will upgrade the shit out of the internet and the benefits will be so obvious in hindsight it’ll hurt. If you do your research right, then you’ll begin to understand what cryptos have value and what don’t.

On the flip side of this, however, there are plenty of cryptocurrencies that quite literally don’t do anything. As I sit here writing this there are 22,322 cryptocurrencies registered on coinmarketcap.com, which is insane, 90-95% of these are garbage and not worth anyone’s time. It’s relatively easy for someone with basic coding knowledge to duplicate a new version of Ethereum and attach a brandable name to it. All you need is a fancy-looking website, a mini army of Twitter bots, and some large influencer accounts who are happy to shill it. And there you have it, you have yourself a new viral shitcoin.

To ensure you stick to good projects and don’t get caught up in viral trends which don’t last two minutes, keep these things in mind:

Avoid dogs cause you might end up stepping in their shit
Meme and dog coins have been done to death, there’s only so much a ‘strong community’ can keep a project going without some fundamental utility. $DOGE and $SHIB had meteoric growth during their respective bull markets, but it’s becoming more and more difficult for new variations to sustain any substantial interest for long periods.
Be wary of trending microcaps
If you see an unfamiliar crypto ticker (e.g. $COIN) trending on socials, it is intended and someone wants you to see it. Beware of becoming someone else’s exit liquidity and buying their bags.
Make your own judgment
Some crypto content creators are absolutely amazing and provide an incredible amount of information and insight for free, but always take anything they say with a grain of salt and… again, going back to step 1, practice due diligence always.
Never ever use leverage, this IS financial advice
You might be unfamiliar with the concept of leverage trading, my advice is for you to keep it that way. Using leverage is a more favourable term for gambling as an investor, the easiest way to get rekt.

This is it for now, but I’m hoping these pointers help you avoid some of the mistakes many of us make when getting started with cryptocurrencies. I’ll be releasing more articles in similar, but probably shorter formats, in the coming months.

In a wicked way I kind of hope you do make some basic, non-life-altering fuck-ups… personally, I have learned a lot about the space, but even more about self-control and discipline by experiencing it the hard way. Crypto has a way of humbling you if the risks of investing in it are underestimated.

Please let me know in the comment box below if you found any of this useful and feel free to subscribe. I aim to release a new post every 1-2 weeks.

Wishing you all the luck on your journey through the Cryptoverse!

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Navigating Crypto as a Beginner #1: F**k the FOMO in 2023

Some steps for what NOT to do if you're looking to get into Crypto.

Step 1: Uninstall Coinbase and step away from the smartphone

Step 2: Don’t half-arse your research

Step 3: Fundamentals before speculation

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