8 Years in the Crypto Market: 8 Mistakes That Cause 90% of Investors to "Burn Their Wallet"

Every day, I read news in the crypto community and I see familiar scenes: some people are panicking, some are frantically cutting losses, some are dividing their capital like salting food, and others are all-in as if gambling. Meanwhile, the market is not as harsh as that — most losses are due to our wrong behavior. I have been in this market for over 8 years, going through enough cycles and witnessing various tragedies. I once naively FOMOed, burned all my capital a few times, and even thought about quitting. But those “face-plant into the rocks” moments helped me see clearly: To survive in this market, you don’t need to know too much — just avoid the 8 mistakes below.

1. Investment Portfolio Turns Into… Grocery Store Many think “dividing into smaller parts reduces risk,” resulting in $10,000 split into 12–15 coins. Every day jumping between numerous charts, but understanding each coin… half-heartedly. Consequences: Good coins are afraid to hold. Bad coins are held until the bottom. One dump can wipe out the entire portfolio. => With less than $100,000 in capital, holding 3–5 coins is best. Focusing on a few strong projects is even better than holding a bunch of junk.
2. Going All-in on a Single Coin Like Betting Your Fate Conversely, many choose to “put 90% of their capital into one trade,” hoping to change their life with one move. But the crypto market moves in cycles and sector groups. Today AI is hot, tomorrow layer2 rises, next week GameFi runs. Holding the wrong cycle, no matter how good the project is, you can still suffer heavy losses. => Divide capital into 3–5 strong groups: infrastructure, DeFi, AI, payments, storage… Pick 1–2 leading representatives from each group.
3. Arguing With the Market — The Mistake That Causes Many to “Burn Wallets” Fastest Many investors think they are right more than the market: Price breaks support but still holds because “it’s probably just a shakeout”… Trend reverses but still hopes “it will turn back around.” Result: small losses turn into big losses. => Golden rule: The market is always right. Don’t be emotional, just rely on data — if the chart looks bad, exit; if the trend is clear, follow.
4. Lack of Patience — Always Must Have a Trade Some can’t stand a few days with an empty wallet. Seeing any coin go up, they want to jump in, afraid of missing out. But the more you trade, the easier to make mistakes. No profits seen yet, fees pile up rapidly. => Patience is not weakness. Patience is what differentiates an investor from a gambler.
5. One Step Too Slow — Seeing Correct But Hands Shaking Many analyze correctly, see good entry points, but… don’t dare to enter. Then, when the price surges, they start FOMO chasing. In the end: right after buying, it hits the top. => Do exercises beforehand — set a plan. Enter only if conditions are right, stand aside if not. Don’t let emotions drive decisions.
6. Not Willing to Set Stoploss — Become an Unwilling Long-term Investor Many have too high expectations for the coin they buy. Price drops 5% → “no big deal” Drops 10% → “probably just a shakeout” Drops 20% → “whatever, I trust the project” Drops 40% → … turn into an unwilling holder. => Stoploss doesn’t make you lose. Stoploss helps you keep capital to continue playing.
7. Confusing “Shakeout” and “Trend Collapse” Seeing a red candle, panic and cut the bottom. Or vice versa, prices drop sharply but still think “it will bounce back soon.” But distinguishing between shakeout and trend break requires looking at: Volume Money flow News Price structure Overall market => Without enough data, don’t guess. If you don’t understand, stay out.
8. Overconfidence — The Mistake Many Never Admit Many people read the 7 mistakes above and then say: “I don’t make these mistakes.” But just open your trading history to review… most likely, 6/7 mistakes have been made before. => To improve, you must dare to self-reflect. Without changing bad habits → results will always stay the same. Conclusion The crypto market doesn’t kill you. Repeating mistakes does. If you are: Buying emotionally Selling in panic Holding a portfolio that’s green and red like traffic lights Trading more and losing more Then the 8 points above are your map to escape that cycle.