Common Mistakes When Investing in Crypto

Key Prevention List

Mistake	Real Case & Example	Prevention Tip
Not Taking Profits	“I waited for my coin to hit ‘one more big pump.’ It collapsed, wiping away unrealized gains.”	Set & follow an exit plan.
Sending Coins to the Wrong Address	$5,000 lost in seconds after copying the wrong wallet address—irrevocable transfer.	Always triple-check addresses.
Not Staking Your Coins	“Left ETH idle for years, missing out on easy staking rewards.”	Learn & use staking features.
Not Securing Your Property	One trader kept all his assets on a phone, lost everything when stolen at a café.	Use hardware/cold wallets for main holdings.
Investing More Than You Can Afford	Many investors borrowed money or dipped into emergency savings—leading to debt during market crashes.	Invest only what you can lose.
FOMO—Buying All Time Highs	Emotional purchases at peaks (FOMO) usually lead to rapid drops and losses.	Don’t chase hype; wait for cooling.
Lack of Research	Real rug pulls: Investors skipped basic research and lost funds to scam tokens.	Review whitepapers, teams, tokenomics.
Ignoring Transaction Fees	Frequent trading and swapping “chasing pumps” eroded profits via hidden fees.	Account for all costs—track carefully.
FOMO—Chasing Losses	Revenge trading after a loss often multiplies damage—one trader lost $20k in a weekend.	Use stop-losses and pause after losses.
Overdiversifying	Portfolio with 30+ coins was impossible to track—missed key moves and suffered compounded losses.	Focus on quality over quantity.

Case Studies & Peer Review

FOMO at the Top: In 2022, thousands rushed to buy Solana at $250 after social media hype. The coin dropped to $8 months later; many held through 90%+ drawdowns instead of exiting at set targets.
Pig Butchering Scam: One US investor, urged by a “mentor,” transferred $400,000 to a fake crypto exchange after rapid profit promises—ultimately blocked from funds and left with nothing.
Emotional Trading Spiral: A Canadian trader, frustrated by missing a pump, doubled down on declining coins to “win back” losses—this revenge trading only compounded losses, showing the need for a systematic plan.
Hardware Wallet Security: After leaving funds on mobile wallets and suffering a hack via phishing, one investor switched to Ledger hardware wallets and peer-reviewed their cold storage practice with a trusted friend for accountability.