Three days ago, I got a message from a good friend:
14.53 transaction fee??? Isn’t it expensive for a $13 investment?"
- Yes, those were his exact words. And yes, he paid for that. (it was a meme coin, if you are curious :))
This is a friend I've been talking to about crypto for years. He lives in Europe, and despite our many discussions about blockchain and cryptocurrency over the last three or four years, it’s only now that he decided to dive into it. Why? I think due to the hype all over the news. He did not want to stay behind, because in a few years his family might ask him why he did not buy crypto...
I want to pause here to emphasize something important: We should not criticize the fact that he invested just $13. Starting small is the best way to learn how the system works without risking too much. Everyone begins somewhere, and it’s better to experiment with small amounts to build confidence in making transactions.
One of his first questions before making the transaction was funny and I would like to share it with you.
"Okay, so when I get a wallet, how do I give my IBAN or wallet address to someone?"
This led to a quick (over the phone) course on the difference between wallet addresses, tokens, and networks. Explaining blockchain basics was absolutely necessary for him to understand, ehm, the basics.
Fast forward to today, December 10th. If you're reading this later, let me set the scene for you: the crypto market is experiencing a significant dip. Bitcoin has fallen to $95,000 (yes, down from the $100K and beyond), and Ethereum is trading at $3,566. The market is red across the board—a “bloodbath,” as some would call it.
(screenshot from CoinMarketCap)
A few hours ago, I received another question:
"Did you see what happened? Everything is down!"
He sounded panicked. I stayed calm and replied:
"Yes, and it may go even lower."
I tried to explain to him that corrections are part of the game, especially after rapid price surges like the recent one.
I am still learning the technical details of market cycles, but I feel I have been part of many different economic trends throughout the years, to understand that volatility is the norm.
What do you think that the key lessons for new crypto users are?
In my opinion, one of the biggest mistakes newcomers make is entering the market during a bull run, right when the prces are skyrocketing and everyone is talking about it. (Even my grandma asked me about it!)
This Fear of Missing Out (FOMO) can lead to:
(a) Financial loss
(b) A crooked, mistaken perception of the crypto market, and of course
(c) (More) Negative reputations for cryptocurrencies.
To avoid those (potentially costly mistakes), everyone entering crypto should at least know the below
(1) Understand the basics of Economic Cycles
Markets move in cycles—ups and downs are inevitable.
The key is not to chase quick gains, because if you make it - it is probably only due to good luck and it may not happen again soon. Do not panic, stay calm and focus.
As the saying goes, “We cannot direct the wind, but we can adjust our sails.”
Educate yourself, observe patterns, and gain experience. These are the only ways to navigate, stay safe and (of course ultimately) earn!
(2) Invest in Learning Before Money
Before starting any new activity—whether cooking, sports, or trading—you would typically take a class, watch YouTube tutorials, or read about it. Why should investing be any different? As another proverb says, “A fool and his money are soon parted.”
Here is a quick overview of what happened during the time of 2017 until 2024 when I am active & in the market (only observing for now)
Key milestones:
2017: The ICO boom brought Bitcoin to an all-time high of nearly $20,000, followed by a crash to around $3,000 by late 2018.
2020-2021: Bitcoin surged past $60,000 during the DeFi and NFT booms, driven by institutional adoption and pandemic-driven interest.
2022: The market faced a major correction with the collapse of platforms like Terra and FTX, leading to a crypto winter.
2023-2024: After a prolonged bear market and a mostly sideway movement, Bitcoin hit an all time high above $100,000 but experienced sharp corrections, reminding us of its volatility.
Now that I am reading all this again, I wish I would have bought some BTC for $4K, hehehe
So, to sum up..
When advising friends about entering the crypto market, my number one suggestion is to approach it as a learning journey. Start small, stay curious, and don’t let FOMO affect your feelings & decisions.
What advice do you give to your friends who are curious about crypto?
Let me know below!
p.s. first image created in Bing
Posted Using InLeo Alpha
