A Survival Guide for Crypto Newbies: How to Build Wealth Long-Term

Author: Alertforalpha

Compiled by: Vernacular Blockchain

Let’s face it: as a newbie, crypto investing can ruin you if you’re not careful.

Most crypto related content is either hype or technical jargon, this guide is neither.

Here’s a survival guide for crypto newbies.

A cruel reality:

Bitcoin could plunge 50% in a matter of weeks. This has happened several times before, with Bitcoin falling 78% from $69,000 to $15,000 in 2022.

Altcoins could drop 90% or more. Some coins will never return to their previous highs.

You can lose all your money overnight. Click on the wrong link, choose the wrong investment, wrong timing – poof, money gone.

But here’s the thing: there are still many people making life-changing fortunes in the crypto asset markets. The difference is knowing how to protect yourself.

01. Only invest money you can afford to lose

This isn't just good advice, it's the key to survival.

“Able to afford the loss” means:

• “Not your rent.”
• “Not your emergency fund.”
• “Not the money you use to buy food, pay bills or feed your children.”
• “It’s definitely not borrowed money.”

Simple test: Don’t invest if losing the money would change your lifestyle.

Real example: If you have $10,000 in savings, invest at most $1,000 in crypto assets. If you lose, you will be angry, but you will not be homeless.

Some people put their entire savings into crypto assets during the bull market. Don’t be that person. They usually end up broke.

02. Understand the true feeling of volatility

Volatility is more than just a fancy word—it’s emotional torture.

Imagine this scenario:

• Monday: Your $1,000 investment grows to $1,200 (+20%).
• Tuesday: Falls to $800 (down 33% from Monday).
• Wednesday: Back to $1,100 (up 37% from Tuesday).
• Thursday: It fell back to $700 (down 36% from Wednesday).

This is common in the crypto asset market. You will feel like a roller coaster of emotions. You will think:

• “Sell everything when the market crashes.”
• “Add to your position when the market surges.”
• "Check prices every 5 minutes."
• "Insomnia."

Psychological trap: Most people buy high when they are excited and sell low when they are panicked. This will lose money even if the overall market trend is upward.

03. Start with Bitcoin, don’t touch random currencies

Why choose Bitcoin first:

• “It’s least likely to go to zero.”
• “It has the longest track record.”
• “Institutional investors choose it.”
• “It’s easier to understand.”

Avoid these beginner mistakes:

• “Bitcoin is too expensive, I buy cheaper coins.”
• “This new coin may increase 100 times.”
• “My friend made money on [a certain altcoin].”

Reality: You can buy $50 of Bitcoin. You don’t need to buy a whole Bitcoin.

Leave the gambling mentality for later. Once you understand how Bitcoin behaves, consider exploring other currencies.

But at the beginning, choose the option with the lowest risk.

04. Fixed investment is your best friend

What is regular investing: Instead of investing $1,000 all at once, you can invest $100 every month for 10 months.

Why it works:

• “Buy more when prices are low.”
• “Buy less when prices are high.”
• “No need to time the market.”
• “Reduce emotional decision making.”

Real case:

• Month 1: Bitcoin is $80,000 and you buy $100 (0.00125 BTC).
• Month 2: Bitcoin is $60,000 and you buy $100 (0.00167 BTC).
• Month 3: Bitcoin is $90,000 and you buy $100 (0.00111 BTC).

In the long run, your average purchase price will be better than trying to guess the best time.

05. Understand the different types of risks

Market risk: The entire market crashes together. Bitcoin, Ethereum, and almost all altcoins fall 70-90% in 2022. There is nowhere to hide.

Individual coin risk: Even if the market performs well, your coins may fail. Remember Terra Luna? It fell from $80 to almost zero in a few days.

Exchange risk: Your crypto platform could get hacked, go bankrupt, or freeze your account. FTX had millions of users until it collapsed overnight.

Technical risks: Smart contracts may have vulnerabilities, DeFi protocols may be attacked, and new projects may be scams.

Regulatory risk: Governments may ban or strictly regulate crypto assets. Some countries have already done so.

06. Don’t be obsessed with leverage trading

Leverage means borrowing money to buy more crypto assets. It sounds tempting when the market is rising.

How it works: You have $1,000 and can buy $10,000 of Bitcoin with 10x leverage.

The catch: If Bitcoin drops 10%, you lose all your $1,000. If it drops 15%, you still owe money.

Reality Check: Leverage is for experienced traders who can afford a total loss. As a beginner, leverage is financial suicide.

Promise and Reality:

• Promise: “Turn $1,000 into $10,000 faster!”
• Reality: Get $1,000 to $0 faster.

07. Ignore the noise

You will see various information:

• “Bitcoin will reach $500,000 next week!”
• “This altcoin is the next Bitcoin!”
• “Crypto winter is over, buy all in!”
• “The government is going to ban Bitcoin tomorrow!”

Fact: No one can accurately predict short-term trends. Even the experts often guess wrong.

Focus on the following points:

• “Learn the basics.”
• “Build up small positions gradually.”
• “Understand the assets you hold.”
• “Ignore daily price fluctuations.”

Stop paying attention to those:

• “An account that promises guaranteed returns.”
• “An account that uses rocket emojis every day.”
• "Accounts claiming to know when to buy or sell."
• “An account that makes you feel like you’ve missed out.”

08. Properly protect your crypto assets

Exchange security: Do not store large amounts of funds on exchanges. Exchanges can be hacked or go bankrupt.

Wallet Basics: For amounts over $1,000, use a hardware wallet (like Ledger or Trezor).

Back up your recovery phrase: Write your recovery phrase down on a piece of paper and keep it in a safe place. This is how you can recover your crypto assets if you lose your wallet.

Never share your private keys or recovery phrases: not with friends, online "help desks", or anyone else.

The most common mistakes made by beginners

• Investing more money than you can afford: often leads to panic selling at the worst possible time.
• Chasing quick gains: jumping from one coin to another, usually buying high and selling low.
• Not understanding what you are buying: Buying random altcoins without knowing what they are used for.
• Emotional trading: making decisions based on fear or greed, rather than logic.
• Blindly following influencers: Taking financial advice from people who make money by selling courses.
• Not protecting your crypto assets: leaving all your funds on an exchange, or losing your recovery phrase.

Simple Beginner Strategy

Month 1-3: Learn about Bitcoin. Buy a small amount ($50-100) to get familiar with wallets and exchanges.

Month 3-6: Start investing in Bitcoin regularly. Invest $100-200 per month according to your budget.

Month 6-12: Once you understand Bitcoin, consider adding Ethereum. Keep it simple.

Year 2 and beyond: If you want to explore altcoins, limit them to 10-20% of your crypto portfolio.

Throughout: keep learning, ignore the hype, and never invest more money than you can afford to lose.

09

summary

Crypto assets can make you money. In the long run, it has also made many people rich.

But it can also destroy you if you go about it the wrong way.

The people who do well in the crypto asset market are not those who chase 100x returns, but those who first protect their principal and then try to increase its value.

Start small and learn as you go. Don't let greed overwhelm common sense.

Remember: the goal is not to get rich overnight, but to avoid bankruptcy while potentially building wealth over the long term.

There is always another chance in the crypto asset market. But if you lose all your money the first time, you won’t be able to participate next time.

Original link: https://a.c1ns.cn/ckJCo

Original title: Beginner's Survival Guide In Crypto

Original author: Alertforalpha

Compiled by: Vernacular Blockchain