Author: Alertforalpha
Compiled by: Blockchain Simplified
Let’s face it: As a newbie, if you are not careful, crypto investing can ruin you.
Most crypto-related content is either hype or technical jargon; this guide is neither.
This is the crypto newbie survival guide.
A harsh reality:
Bitcoin could drop 50% in a few weeks. This has happened multiple times; in 2022, Bitcoin dropped from $69,000 to $15,000, a decline of 78%.
Altcoins can drop 90% or more. Some coins may never return to their previous highs.
You could lose everything overnight. Click the wrong link, make the wrong investment, time it wrong—bam, money gone.
But the key is: Many people have made life-changing wealth in the crypto asset market. The difference is knowing how to protect yourself.
01. Only invest what you can afford to lose
This is not just good advice, but the key to survival.
“Can afford to lose” means:
“Not your rent.”
“Not your emergency fund.”
“Not money you use to buy food, pay bills, or raise children.”
“Absolutely not borrowed money.”
Simple test: If losing this money would change your lifestyle, don't invest.
Real case: If you have $10,000 in savings, invest no more than $1,000 in crypto assets. If you lose it, you'll be upset but not homeless.
Some people invest all their savings in crypto assets during a bull market. Don't be that person. They often end up bankrupt.
02. Understand the real feeling of volatility
Volatility is not just a fancy word—it is an emotional torment.
Imagine this scenario:
Monday: Your $1,000 investment rises to $1,200 (+20%).
Tuesday: Drops to $800 (33% drop from Monday).
Wednesday: Rebounds to $1,100 (37% rise from Tuesday).
Thursday: Drops again to $700 (36% drop from Wednesday).
This situation is common in the crypto asset market. Your emotions will feel like a roller coaster. You will think:
“Sell everything in a crash.”
“Buy more during a surge.”
“Check prices every 5 minutes.”
“Insomnia.”
Psychological trap: Most people buy high when excited and sell low when panicking. Even when the overall market trend is up, this will still lose money.
03. Start with Bitcoin, avoid random coins
Why choose Bitcoin first:
“It is the least likely to go to zero.”
“It has the longest track record.”
“Institutional investors choose it.”
“Easier to understand.”
Avoid these beginner mistakes:
“Bitcoin is too expensive; I'll buy cheaper coins.”
“This new coin might go up 100 times.”
“My friend made money on [some altcoin].”
Reality: You can buy $50 worth of Bitcoin. You don’t need to buy a whole Bitcoin.
Set the gambling mentality aside for later. Once you understand Bitcoin's behavior, then consider exploring other coins.
But at first, choose the option with the lowest risk.
04. Dollar-cost averaging is your best friend
What is dollar-cost averaging: Instead of investing $1,000 at once, invest $100 every month for 10 months.
Why it works:
“Buy more when prices are low.”
“Buy less when prices are high.”
“No need to predict market timing.”
“Reduce emotional decision-making.”
Real case:
Month 1: Bitcoin at $80,000, you buy $100 (0.00125 BTC).
Month 2: Bitcoin at $60,000, you buy $100 (0.00167 BTC).
Month 3: Bitcoin at $90,000, you buy $100 (0.00111 BTC).
In the long run, your average buying price will be better than trying to guess the best timing.
05. Understand different types of risks
Market risk: The entire market crashes together. In 2022, Bitcoin, Ethereum, and almost all altcoins dropped 70-90%. Nowhere to hide.
Individual coin risk: Even if the market performs well, the coin you choose may fail. Remember Terra Luna? It dropped from $80 to almost zero in days.
Exchange risk: Your crypto asset platform could be hacked, go bankrupt, or freeze your account. FTX had millions of users until it collapsed overnight.
Technical risk: Smart contracts may have vulnerabilities, DeFi protocols may be attacked, and new projects may be scams.
Regulatory risk: Governments may ban or strictly regulate crypto assets. Some countries have already done so.
06. Don't be obsessed with leveraged trading
Leverage means borrowing money to buy more crypto assets. Sounds tempting when prices are rising.
How it works: You have $1,000, with 10x leverage, you can buy $10,000 worth of Bitcoin.
Trap: If Bitcoin drops 10%, your $1,000 is all gone. If it drops 15%, you still owe money.
The reality is: Leverage is for experienced traders who can handle total loss. For beginners, leverage is financial suicide.
Commitment vs. reality:
Commitment: “Make $1,000 turn into $10,000 faster!”
Reality: Make $1,000 turn into $0 faster.
07. Ignore the noise
The various information you will see:
“Bitcoin will rise to $500,000 next week!”
“This altcoin is the next Bitcoin!”
“Crypto winter is over, buy everything!”
“The government will ban Bitcoin tomorrow!”
Truth: No one can accurately predict short-term movements. Even experts often guess wrong.
Focus on the following points:
“Learn the basics.”
“Gradually build small positions.”
“Understand the assets you hold.”
“Ignore daily price fluctuations.”
No longer focus on those:
“Accounts that promise guaranteed returns.”
“Accounts that use rocket emojis every day.”
“Accounts that claim to know when to buy and sell.”
“Accounts that make you feel like you are missing out.”
08. Properly protect your crypto assets
Exchange security: Do not store large amounts of money on exchanges. Exchanges can be hacked or go bankrupt.
Wallet basics: If the amount exceeds $1,000, use a hardware wallet (like Ledger or Trezor).
Backup recovery phrases: Write down recovery phrases on paper and keep them safe. This is how you recover crypto assets after losing your wallet.
Never share your private keys or recovery phrases: Do not share with friends, online 'customer service' or anyone.
Common mistakes beginners make
Investing beyond your means: Often leads to panic selling at the worst times.
Chasing quick returns: Jumping from one coin to another, often buying high and selling low.
Not understanding what you bought: Purchasing random altcoins without knowing their purpose.
Emotional trading: Making decisions based on fear or greed instead of logic.
Blindly following influencers: Listening to financial advice from people who profit by selling courses.
Not protecting crypto assets: Putting all funds on exchanges or losing recovery phrases.
Simple beginner strategy
Months 1-3: Learn about Bitcoin. Buy a small amount ($50-100) to familiarize yourself with wallets and exchanges.
Months 3-6: Start dollar-cost averaging Bitcoin. Invest $100-200 a month based on your budget.
Months 6-12: After understanding Bitcoin, consider adding Ethereum. Keep it simple.
Year 2 and beyond: If you want to explore altcoins, limit their proportion in your crypto portfolio to 10-20%.
Throughout: Keep learning, ignore the hype, and never invest more than you can afford to lose.
09
Summary
Crypto assets can make you money. In the long run, they have also made many people wealthy.
But if you do it wrong, it could ruin you.
Those who do well in the crypto asset market are not those chasing 100x returns, but those who first protect their principal and then try to grow it.
Start small, learn by doing. Don't let greed overwhelm common sense.
Remember: The goal is not to get rich overnight but to avoid bankruptcy while having the potential to accumulate wealth long-term.
The crypto asset market will always have another opportunity. But if you lose all your money the first time, you won't be able to participate next time.
Original link: https://a.c1ns.cn/ckJCo
Original title: Beginner’s Survival Guide In Crypto
Original author: Alertforalpha
Compiled by: Blockchain Simplified
