Making a fortune with bitcoin (BTC) and cryptocurrencies during a bull cycle can change your life, but it also brings risks that go beyond trading charts.
The euphoria of seeing green numbers on your screen can cloud judgment, and without precautions, what you gained quickly can vanish even faster.
1. Telling everyone
Talking about your fortune in cryptocurrencies is an open invitation to problems. The more you share, the more you expose yourself to scams, extortion, or even physical attacks.
Crimes against crypto asset holders are on the rise. As reported by CriptoNoticias, in New York, John Woeltz, 37, was arrested after kidnapping an Italian businessman to obtain the password for his digital assets.
The plot began on May 6, when both met for supposed business, but Woeltz immobilized the victim and confiscated his passport.
Similar cases have occurred in Marbella, where a trader was held by three Britons demanding 30,000 euros in bitcoin, and in France, where David Balland, co-founder of Ledger, was kidnapped in his own home. Discretion is not just a virtue; it is a necessity.
2. Displaying an ostentatious lifestyle on social media
This is something related to the previous point. Posting photos of luxury cars, expensive watches, or extravagant trips on social media may seem like a way to celebrate, but it is a magnet for problems.
You not only attract thieves and scammers but also tax authorities. ARCA from Argentina, Hacienda from Spain, the U.S. IRS... could be keeping an eye on what you do on your social media.
Additionally, displaying your lifestyle could even lead to family issues. Why not keep those memories for yourself and your true inner circle?
3. Refusing to take profits
If you are in this market for monetary gain, then you cannot refuse to take profits (i.e., exchange your volatile assets for stablecoins, some strong fiat currency, or for goods and services).
The digital asset market is volatile, and if you don't secure part of your profits, a sudden drop can hit you hard.
For example, in the crash of May 2021, bitcoin lost almost 50% of its value in weeks. Among the reasons that led to the drop in BTC, Elon Musk announced that Tesla would suspend payments with bitcoin due to environmental concerns over the high energy consumption of Bitcoin mining and China intensified its measures against the digital currency.
Not taking profits can also limit your ability to seize other opportunities, such as investing in less volatile markets. Define a percentage of your profits to withdraw at each stage of growth; for example, sell 20% when your investment doubles and another 20% if it triples.
Use those profits to diversify into less risky assets or to cover immediate needs, like paying off debts or creating an emergency fund. Don't expose yourself to losing it all (which is possible if you trade altcoins) by not acting in time; greed can become your worst enemy.
4. Leaving bitcoin and cryptocurrencies on exchanges
Leaving your funds on exchanges is like leaving your wallet on the street. You don't control those coins; the exchange does. If the platform goes bankrupt, is hacked, or blocks your account, you could lose it all.
A clear example is the collapse of FTX in 2022, when thousands of users lost their funds after the bankruptcy of one of the largest exchanges in the world, leaving a hole of billions of dollars.
Use cold wallets —physical devices or offline systems to store your cryptocurrencies— and follow secure personal custody protocols. Cybersecurity is critical, especially as attacks on crypto asset holders are on the rise.
5. Ignore tax planning
Profits from cryptocurrencies are not exempt from taxes, and neglecting this aspect can cost you dearly.
Consult with a tax advisor specialized in crypto assets to structure your profits legally and efficiently. A solid tax plan avoids unpleasant surprises.
Not declaring your profits can also complicate the legitimization of your money for large purchases, like a house, since banks require traceability of funds. Additionally, transactions with cryptocurrencies often leave a trace on the network that authorities can track, increasing the risk of audits.
Keep a detailed record of all your transactions, including purchases, sales, and exchanges, to accurately calculate capital gains. Consult with a tax advisor specialized in crypto assets who understands local and global regulations, and consider paying taxes in advance to avoid penalties. Don't let a lack of tax planning turn your profits into a legal nightmare.
6. Trusting anyone
When you have money, 'friends' and 'experts' appear out of nowhere with irresistible proposals.
From dubious investment projects to promises of guaranteed returns, the world of bitcoin and cryptocurrencies is full of scammers.
A notable case is that of Solesbot, a Ponzi scheme that affected thousands of people in Venezuela and Colombia in 2024. The platform promised investors a way out of poverty, but it collapsed when mass withdrawals led Binance to freeze the funds, as reported by CriptoNoticias.
Affected users, who even took out loans to invest, organized class action lawsuits against the founder, Raúl Soles, who made public statements trying to calm investors while the wallets were left at zero.
Don't trust strangers, no matter how charismatic they may be, and never share access to your funds. Research any proposal thoroughly and keep skepticism as your best ally.
7. Thinking you will always win
Believing that your trades will always be profitable is a mistake. The digital asset market is volatile, and the arrogance of thinking that you will always be right can lead you to take risks without strategy.
For example, in 2022, the collapse of Terra(LUNA) and its stablecoin TerraUSD (UST) saw its capitalization drop from $40 billion to almost zero in just a few days, affecting millions of investors. The debacle of Terra had a visible impact on the market; bitcoin and the rest of the major cryptocurrencies hit rock bottom.
Cryptocurrencies not only face drops due to internal factors, such as protocol failures, but also due to external events, such as government regulations or changes in global interest rates that affect market liquidity.
The important thing is not to ignore warning signs, such as unusual trading volumes or news about restrictions in key countries. Set loss limits (stop-loss) to protect your capital and review your portfolio regularly to adjust your risk exposure.
Don't get carried away by euphoria; a drop can make you lose in an instant what you gained in months. Maintain a clear, realistic strategy based on analysis, not emotions.
8. Living as if the bull run were eternal
Spending as if the bull market will never end is a recipe for disaster. Don't adjust your lifestyle to an unsustainable level, because if the market falls, you could end up stuck with debts or expenses that you can't cover.
Establish a monthly budget that does not depend on profits from cryptocurrencies and stick to it rigorously. Create an emergency fund that covers at least six months of your basic expenses, kept in a bank account or in low-risk liquid assets.
9. Neglecting financial education
Winning in bitcoin and cryptocurrencies doesn't automatically make you a financial genius. If you don't know how to create a budget, control expenses, or understand concepts like inflation, taxes, and diversification, you'll burn through your fortune quickly.
Don't ignore your financial education; read books; watch videos from specialists and consult with accountants to make informed decisions.
Look for resources appropriate to the country or state you are in, so the advice you receive is easily applicable.
10. Neglecting life outside of trading
Obsession with your wallets and charts can make you forget what matters most. Use your profits to improve your health, strengthen family ties, travel with your partner, or mend broken relationships.
The obsession with trading and investments should not consume you. A fulfilling life is worth more than any number on a screen.
A report from the Journal of Primary Care and Community Health revealed that many cryptocurrency traders exhibited behaviors similar to addiction, trading compulsively even when it results in financial losses. High levels of psychological distress, such as anxiety and depression, were found to be related to the volatility and risks of the market.
Ultimately, don't live just for your portfolio; use your profits to improve your mental health with therapy, spend quality time with your loved ones, or travel with your partner. A fulfilling life is worth more than any number on a screen.
Making a lot of money with bitcoin and cryptocurrencies is just the beginning. Protecting your capital, privacy, and well-being requires discipline and smart decisions. Don't let euphoria blind you: act with caution, plan carefully, and live in balance. Only then will you transform a temporary gain into lasting wealth.
