There can be numerous reasons why one may lose money in crypto markets. We are not after all of them. Rather, we want to focus on & address the most common ones in this article.
Investing in ICOs
The Big Coin narrative holds too strong for many investors; especially among the newbies of crypto markets. Making huge gains by investing big & early in so-called promising future projects is what contributes to most such failures. A ton of new coins are controlled by a few people and their primary intention is to dump on the retail investors who participate in the last.
Fear of Missing out or FOMO makes up for another trap for investors. The news of 5X moves in cryptos is not uncommon but to fall in for such moves can often make you realise that you entered during the peak. A 50% fall from here will be enough for most investors to get into panic selling mode.
Subscribing to a Product without fully understanding it
There are a lot of products out there offering fixed returns, fixed yields, and an abnormally high APY which are not sustainable in the long term and would generally result in you losing money. There are also a lot of bots which do not explain in detail how they work and operate in black boxes. It would be advised to get more details on such product and be 100% confident of the choice you make.
Aiming for trending projects in a bull market
In all its fairness, by the time the news of something trending in the market reaches you the chances are there is no fuel left in the tank. The prices have already gone soaring high, and it’s mostly at a stage where the promoters would dump it on the retail investors, to avoid being caught in this, it is advisable to do your own research for the project/token/coin before relying on random pump/tips groups
Scams / Ponzi Schemes
Although cryptocurrencies aim to decentralize the control mechanism, the technology is still developing. Practically, each coin or token has its own community that advocates, supports & propagates it through the initial stages. It’s a closed knit group of people operating on the majority of the crypto coins. Manipulations cannot be ruled out and hence chances of possible scams. A lot of Ponzi schemes have surfaced recently, where investors have resulted to lose money in crypto.
At Sypto, with our Athena strategy, our primary focus is to preserve investors money. In the entire time-period since we went live, BTC is down by 70%+ and our portfolios are down by just -3%. Its 100% transparent with all the funds always in user wallet and we take only trading permissions.
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