Why You'll Regret Buying Crypto In 2022

What's up, Graham? It's Guys here. So I think it's about time we have an honest, open talk about something that's been on my mind for a while now. Imagine taking your hard-earned money, ripping it in two, and now you're left with half of what you started with. Or even worse, you took too long to cash out. I'm going to take a little bit more and, uh, there you go. That's yours. Better luck next time.

Well, if that seems dramatic to you, it might not be, because this is pretty much what happened to the entire cryptocurrency market over the last 30 days. Now, if this were any other asset class, I would tell you my typical "don't time the market, don't panic" and any fluctuations in price are normal. But with cryptocurrency, there's a very real potential of potentially losing everything depending on what you're invested in.

I'm seeing a lot of bad advice online from people who have no idea what they're talking about that could potentially cost you a lot of money if you aren't careful. So I'm going to take the stance that you should probably not be investing in cryptocurrency right now unless you have the discipline to follow five strategies that will give you the best chance at coming ahead profitable.

Because I got to say, it's a lot more prevalent for people to lose their hard-earned money than it is to turn a small investment into a mini fortune while knowing the right time to cash out to a comfortable retirement. And that is what we need to talk about today.

But before we go into that, we got to talk about why you should not smash the like button for the YouTube algorithm. In fact, you want to know what all of these people have in common? Yeah, I have no idea either. But chances are they would make that like button turn blue. And best of all, thank you for all of your support and like button smashing. Here's a picture of a baby clownfish, so thank you guys so much. And by the way, this is fake money, so you have nothing to worry about.

All right, so first things first, you should not be investing in cryptocurrency as a way to get rich quick. I think too many people are enamored by looking back on the past and rationalizing that had they just invested $1,000 in Bitcoin on April 15th, 2011, they would now have $38 million. Or they think that if they could just catch the next Dogecoin before it rallies 13,000% in a year, they'd have it made.

But actually doing that and exiting successfully is next to impossible, and more often than not, the majority of people end up losing a significant amount of money trying to emulate the trades of other people. The other downside of this is that it encourages extremely risky speculative behavior to the point where earning a 20% return on your money is no longer worthwhile when the guy getting bottle service at the club is posting about his 100x return. Which by the way is definitely not financial advice.

Not to mention, in order to do something like this successfully and actually make a life-changing amount of money from a small investment, it takes insurmountable emotional intelligence, self-control, and discipline to ride through the volatility, sell when you've hit your goal, and not get consumed by greed when everyone thinks it's going to continue going higher. Very few people have the skills to do this effectively, and for a lot of people out there, I would chalk this up to luck rather than sophistication.

Which means replicating these same strategies over and over again while 10x-ing or 20x-ing your money is just realistically not feasible. So even though, yes, you can make a lot of money investing in cryptocurrency, if you view it as a way to get rich quick, that's inevitably going to lead to the same mentality that causes you to buy when it's already going up, sell at the slightest glimpse of any vulnerability, and consequently lose money without having the discipline of a pre-planned entry and exit point.

So instead of thinking of this as a way to get rich quick, invest an amount that you're willing to hold on to long-term. Once it hits a level where it makes sense to sell, whether that's within a few days, years, or decades, sell.

Speaking of that, you should not invest in cryptocurrency if you're not prepared to lose money. I think at this point, it's pretty safe to assume we're going to continue to see rather large corrections and sell-offs. If you're not prepared to invest your money and see 90% of it disappear completely into the abyss, potentially forever, then you should not be investing in cryptocurrency.

The biggest problem that I see with this is that it's way too easy to buy high all at once and then sell low when everyone moves on to something else, with the mindset that you may as well just sell now while you still can. That just winds up creating this cycle where you buy, you get discouraged, you lose, you save up more money, you buy again for all the wrong reasons, you sell it when it goes down, and you're perpetually caught in this trap of losing even if the coins themselves are actually good.

So instead, I would only invest what you're willing to lose, and I would only invest what you're comfortable watching drop in value. Otherwise, as soon as you get worried or emotional watching your account go up in flames, you're more likely to make impulsive, emotionally driven reactions that might end up hurting more than they help.

For myself, I prefer to buy in consistently in small amounts and then add on to my position over time. That way, I never just buy in all at once, because I know my chances of timing the market correctly are pretty much non-existent. Instead, I can use any drop in price as a reason to go and buy a little bit more, and really, no matter what happens, I'll be able to average my buy-in over time. I'm never investing more money than I'm prepared to lose.

I don't intend to use this money for decades and I've made a plan ahead of time that I'm going to stick with no matter what the price trades at. By doing this, you're going to be much more likely to invest level-headed without reaction so that way you'll be able to ride the volatility to your advantage.

Third, you should also not invest in cryptocurrency if you're not prepared to diversify. Like right now, on CoinMarketCap, there's over 10,000 different projects and cryptocurrencies that people have a chance to invest in. But how many of them do you really think will be successful and will actually be around 10 to 20 years from now?

Like, do you really think Lady Luck is going to be the next big thing? Or what about Baby Token or Anti-Cam Token? Most likely, the entire cryptocurrency market is going to look vastly different 10 years from now, and predicting which ones are going to be successful is going to be pretty much impossible without diversifying.

To put this into perspective, just look at the dot-com bubble. 20 years ago, in 1999, there were 457 IPOs, with 117 of them doubling in price the first day of trading. Back then, the biggest doomer company was Netscape, which dominated the internet as a search engine before Google. Near the bottom on the list was Amazon and Yahoo, of which only one of the previous top 10 actually became incredibly successful.

But Amazon also went through a time where it dropped 90% in value and took nearly a decade to recover to where it once was before the sell-off. I guarantee back in 2002, when it fell in price, very few people could have predicted the Goliath that would be here today. The point I'm trying to make is that I have a feeling that something similar is also going to happen with cryptocurrency, and these top 10 coins are going to look dramatically different 10 years from now as the market changes.

That's why I recommend diversifying your investment across multiple cryptocurrencies instead of just picking one or two that you think might 100x and make you as rich as possible. By doing this, you're going to have a much greater likelihood of actually investing in something that's going to be around in the long term. And if a few of them don't work out, well that's fine because you're going to have something else to fall back on.

I would also see your entire cryptocurrency investment as a small part of your entire portfolio, bolstered by other asset classes that have a long-standing track record. For example, combine your cryptocurrency with the stock market, or an index fund, or a rental property that will give you consistent income regardless of what happens with investments like this. It's going to be pretty much impossible to lose money as long as you take the proper steps to diversify.

Fourth, you should absolutely not invest in cryptocurrency if you're not prepared to do your own research. At this point, everyone jokes about the shills that post their mind-blowing profits with the disclaimer "not financial advice" plastered across the whole thing, as though that's going to keep them out of jail if the SEC ever decides to regulate them as securities.

But truth be told, too many people are buying into whatever they see getting the slightest glimpse of hype, hoping to ride it as close to the moon as possible without doing any actual research into what they're really buying into. And listen, we're all guilty of this to some degree. I've been dumb and bought crap that I didn't fully research.

And I have to say, every single time that I have listened to somebody on a highly speculative, volatile investment, I have lost money. But where people go especially wrong is when they listen to someone like that, invest all of their money into one single project, and then get caught in the dump when everything plunges in value. It's a really expensive lesson to learn, but it's something easily avoidable by instead waiting 5 days before you make the investment and using that time to research as much as you can in the big picture if it's actually something worth investing into.

Waiting 5 days is not going to make any difference, and that's going to give you enough time to sift through all of the crap and give you something that's actually worth investing into. Not to mention, chances are if you're worried about investing as fast as possible because in 5 days from now it will have tripled in price and you'll have missed out on all the upside, then realistically, it's probably not something that you should be partaking in.

Good companies and currencies don't just have a 5-day window of profit and that's it. And when it comes to investing, patience is one of the best qualities to have.

And finally, fifth, you should not invest in cryptocurrency if you find yourself getting too emotional over the price fluctuations. This, unfortunately, is one of the most difficult aspects of cryptocurrency right now. And when emotions are high, it makes it impossible to make a level-headed, logical decision.

This is far too common in the cryptocurrency world, where if you say anything negative or critical about a project, you're downvoted into oblivion for spreading fud. But if you're blindly optimistic for the purpose of being strong for the community, people love it, and they passionately follow along because they believe that cryptocurrency is the golden parachute that's going to make them rich.

But the problem is this creates an echo chamber effect of only hearing the information you want to hear without being able to hear other viewpoints, which would give you a more broad perspective. For example, even though it's cool to say that you have diamond hands and will hold no matter what, the truth is there can be good opportunities to sell.

And there's nothing wrong with taking profits if you're sitting on an insurmountable amount of money. I really hate how it's become like this badge of honor to hold on as long as possible just because it's worked in the past. We really shouldn't look down on people who sell. There's no shame in having paper hands, and if you hit your target faster than expected, take profits, de-risk, and treat yourself, because you've won the game.

Now, that is not to say that you should panic and sell the moment something goes down, or sell as soon as you make any amount of money. But if certain price points might not be warranted or it's held up by a lot of enthusiasm and big promises while you're sitting on a lot of money, especially if that money can make a difference in your life, then there's nothing wrong with selling, and I stand behind that.

You should not let your pride get in the way of making sound investment decisions or hearing other perspectives, even if you disagree with them. And for some reason, this is especially common in cryptocurrency.

So if you want to be a successful investor in everything, not just cryptocurrency, you should absolutely listen to other perspectives. If you find yourself getting too fixated on watching the price nonstop or getting too emotional if the price drops or goes up in value, that's probably a sign that you're too heavily invested. You should probably diversify your holdings and you should always make sure you have enough cash on hand to hold you through times where things go down in value and take a while to recover.

If you could do that, I promise you're going to be a more well-rounded investor and more likely to make money long term. And listen, no one is perfect and everything I mentioned is going to affect all of us to some degree. I've made similar mistakes in the past. I've been too stubborn to listen to other perspectives, and I've been so programmed to do everything my way that I missed out on other opportunities.

But the more you immerse yourself in the world of investing, the more you begin to realize the similarities between everything from real estate to stocks to cryptocurrency. And that's why it's important to take these suggestions and apply them to your entire portfolio.

Now, by doing this, sure, I'm not going to be tripling my net worth in the next year, but it's stable, it's consistent. I don't need to lose sleep at night worrying about my portfolio evaporating in value. And best of all, I could still get my free stock worth all the way up to $50 using the link down below in the description.

In fact, I got a free stock right here, so let's open it up and see what I got. And there we go, I just got $17 worth of Apple. I'm actually pretty impressed.

So with that said, you guys, thank you so much for watching. I really appreciate it. As always, make sure to destroy the like button, subscribe button, and notification bell. Also, feel free to add me on Instagram; I post it pretty much daily. So if you want to be a part of it there, feel free to add me.

There, as on my second channel, The Graham Stephan Show, I post there every single day I'm not posting here. So if you want to see a brand new video from me every single day, make sure to add yourself to that. Thank you guys so much for watching, and until next time.