Trading vs. Investing: The Pitfall of Chasing Short-Term Gains
A friend of mine follows a highly speculative approach to crypto. He buys Bitcoin at $94K, sells it at $100K, and waits for a pullback to re-enter. While this strategy may work in highly volatile markets, it leaves him stranded in stablecoins during sideways trends, earning a modest 8% annual return in Earn programs. More than once, he has exited at $100K, only to watch Bitcoin climb to $105K or beyond, missing out on greater opportunities.
At his core, he’s not an investor but a pure speculator—his focus isn’t on Bitcoin’s underlying value but on flipping assets for quick profits. This mindset isn’t unique; many in the crypto space chase short-term gains without understanding the projects they invest in. This behavior explains why meme coins thrive and why governance tokens are hoarded by individuals who never actively participate in decentralized decision-making.
While speculation isn’t inherently wrong, a healthier approach would involve strategic accumulation and long-term vision. Instead of constantly rotating between coins in search of the next pump, investors should identify strong projects, hold through cycles, and allow their portfolios to grow organically. This shift in mindset could lead to a more resilient crypto ecosystem, reducing the prevalence of low-quality projects and market inefficiencies. Sustainability in crypto isn’t just about making money—it’s about investing in the future of blockchain technology itself.