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Reading: Bit(ten by the)Coin: Tips on How to Avoid Bitcoin and Crypto Disasters
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Voice of Crypto > News > Bit(ten by the)Coin: Tips on How to Avoid Bitcoin and Crypto Disasters
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Bit(ten by the)Coin: Tips on How to Avoid Bitcoin and Crypto Disasters

Aditya Sharma
Last updated: 2023/03/09 at 6:43 AM
Aditya Sharma Published June 8, 2022 March 9, 2023
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Bitcoin and Crypto Disasters

Here’s where most of us went wrong. 

Contents
2. Lack of diversification3. Spending too much time on Twitter / Discord4. Believing Bitcoin is the Silver Bullet 5. NDYOR

Investments are emotional rollercoasters in reverse. Going down is unquestionably the least favorite for nearly everyone involved (no puns intended). 

And crypto? It’s a ride and then three more. People have gone from Ladas to Lamborghinis and from Lamborghinis to Luna in vertigo inducing rises and falls. 

On days we had the Terra Luna fiasco, I went on to Twitter and came across a few tweets that drove the crash’s seriousness for even a non-invested person like me. One of them was from a person who’d lost his entire life’s savings in the market wipeout. Quickly on the heels was a  bitcoin crash induced by Jupiter’s gravity, and that tweet then had company. A lot of it. 

It’s pretty easy to make fun of someone when they’re down. Given that the bitcoin/crypto community isn’t immune to finding hilarity in screw-ups inherent to the traditional financial system,  it is but fair to have expected folk on the other side smirk from behind their financial reporting desks. 

Let’s not go down that route.  

It’s too easy to take it right now. It was tempting to put together a listicle of “10  funniest tweets about the crypto crash”, but I’ll leave that to deadline-stressed writers.  

I will instead look at where Bitcoin investors went wrong to have faced such disastrous results this time.  

And mind you, when I refer to Bitcoin, it can be taken as a proxy for most other currencies as well.

1. Greed

This one is the easiest to find and is most evident by its brazen presence. Bitcoin has gone from dollar parity to 60000x in about a decade. Who doesn’t like that sort of RoI?  

What started as an alternative to a broken financial system quickly became plagued by the same disease that had plagued the latter since its inception—unfettered greed.  

People flocked to bitcoin like huskies to snow, and the more they flocked to it, the more valuable it became. For all the failings of traditional systems Bitcoin should have avoided, speculation was the most dangerous.  

The snowball became bigger and bigger till the heat got too much. Then it simply broke apart. Many ruined could have exited at $50,000 or even $55,000, but greed got to them.  

Then some people took out loans to leverage returns that crypto was providing. And anyone smart enough to take a loan to re-invest it in the financial markets also should be smart enough to know that one should never play with someone else’s money unless they’ve asked you to. 

For all the participants in a seemingly prudent and secure financial system, greed seems to have attracted more than the requisite number of reckless profit-cashing junkies.

2. Lack of diversification

To the guy who lost his life savings in the Terra Luna wipeout: 

What. The. F*ck. Mate?  

Who the hell puts all their eggs in a single prototype basket? 

Let’s be fair. All said and done, Bitcoin / Crypto is really new and still has a long way to go to be considered a proven and stable financial setup. New challenges are discovered every day, use case scenarios are relatively rare, and the tech has more than a few legitimate challenges in the way of even middling adoption. 

That being undisputed, what do people who are smart enough to deal in even more complex and fringe products do? Putting all their money into one basket.  

And that too a basket that might have a bottom made of butter paper. 

For a relatively smart bunch of people, crypto-bros can be extremely stupid. 

We all have grown up knowing well that we shouldn’t keep all our money stashed under a  mattress in case there’s a robbery. Or a fire. Or a fire set by robbers. 

Not only do some people invest all their money into crypto, but some also go ahead and put it into a single coin! 

Sure mate, I didn’t put all my money in biotin with the dreams of owning a condo in Miami. But that bank deposit and blue-chip equity fund I placed parts of it in are indeed helping me keep my car from getting repossessed. 

3. Spending too much time on Twitter / Discord

The bitcoin community has become pretty toxic in parts. Some crypto-bros spend ALL of their time and effort on Twitter and discord. If that wasn’t enough, it’s become a badge of pride to be singularly obsessed with crypto. Anyone who doesn’t spend every waking moment reading tweets, retweeting them, participating in long winding threads and whatnot is not seen as “serious about crypto” or “a part of the revolution.” 

Yeah. Nah. 

There’s a lot more to life than one brand of technology or financial instrument. And we need that to be normalized. 

Not only is this endless obsession with Bitcoin among passionate holders leading to burnouts and financial ruin, but we also have on our hands the adverse health impacts of the related lifestyle. Physical  AND mental. 

Even if the coin never plummets again (which it most certainly will), what will you, the obsessed do with it? 

Profit, I hear?  

When? 

And who will you enjoy those profits with?

Are you drinking Dom in the beach condo with your Twitter buddies? 

Maybe one in a million of you will. 

And those are odds that I am not willing to take when it comes to my life.  

4. Believing Bitcoin is the Silver Bullet 

Hate to break this to you. 

It isn’t. 

Sure it is an up-and-coming technology at the very least. But something that transforms all ills of financial and social setups?  

No. 

The problem with financial systems isn’t the systems themselves. It is human nature. No economic system or instrument is immune to the faults in human nature. So, there is never going to be a silver bullet. 

Ever. 

Now please stop believing and preaching that bitcoin or crypto will turn our world into the garden of Eden. 

The system will never be the utopia that early crypto adopters (especially) preach. It will be yet another system with different faults. But there will be faults.  

Romanticizing crypto to the point of aggressive defense and severe emotional investment is one of the most dangerous trends I have noticed in crypto. It came first in the Bitcoin community. 

This leads to heartbreak, man. 

As much as the fall from 60k to sub 29k hurts financially, it takes a solid toll if you are invested in the system emotionally. Anger and disbelief lead to depression, conspiracy theories, doom scrolling, and a general fall-out in other areas of life. 

For it’s not just the monetary value that’s halved, but so has your faith and perceived social value. 

So no, do not believe that Bitcoin is what will revolutionize the world and turn it into an egalitarian paradise where we play harps for butterflies. For that leads to blind faith. And blind faith leads to nothing but disaster. 

5. NDYOR

Not Doing Your Own Research. 

New to Bitcoin or crypto?

Do some reading up before you shove money in their FFS! 

Sure, if you have loose change that you don’t mind losing and want to learn, do, go right ahead.  That, in fact, is a great way to learn. 

But don’t just saunter in there; look at a rising graph and throw a sizeable chunk of your financial being into the coin. 

If you’ve been doing that, you deserve to lose your money. 

Listen, if you don’t know how to ride a motorcycle, will you hop on one, start it and try to take it down a mountain road because you heard it’s appealing? 

I sure hope not. TBH I am sure those sorts would not have read this far. 

So you, as a smarter-than-a-severe-idiot member of the species, should do your own research and THEN invest what you think is prudent. 

For the more you know, the more you know how little you know. 

And once you know you know little, it becomes second nature to be cautious. 

Now I know it’s hoping for too much, but I hope that here on, there is widespread caution, and whichever level Bitcoin settles at is a level that’s based on cautious and solid participation. 

Rather than a rally fuelled by sheep-like behavior. 

Which, at the very outset, is f*cking ironic.

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