Entering the cryptocurrency market can feel like stepping into a whirlwind of opportunity and risk. For many, the allure of rapid gains is irresistible—but the reality often involves valuable lessons learned through loss. This narrative explores one graduate student's challenging first year in crypto, detailing the emotional swings, strategic missteps, and hard-won insights that define so many beginners' journeys.
What Drew Me Into the Crypto World
Influence of Peers and Social Media Trends
The initial pull toward cryptocurrency often comes from external influences. In my case, it was a combination of friends who were already investing and the constant buzz on platforms like Twitter and Weibo. Stories of dramatic gains from assets like Dogecoin and Shiba Inu created a sense of urgency and excitement. I remember checking prices one afternoon, only to wake from a nap and find Shiba Inu had skyrocketed from -20% to +120%. That moment of shock and fascination marked the beginning of my investment journey.
Research Through Content Platforms
I turned to platforms like Zhihu to deepen my understanding of market trends and historical performance. Reading analyses from various contributors who predicted massive surges—like Ethereum reaching $10,000 or Bitcoin hitting $100,000—fueled my optimism. Comparing past prices with current values made it seem like a wealth-building opportunity was just within reach.
Previous Investment Experience and Mindset
Having previously invested in niche markets like limited-edition sneakers, I was no stranger to long-term holding strategies. My approach involved buying during off-seasons and selling during peak demand, achieving returns of over 50% annually. This background gave me confidence that a patient, long-term strategy would also work well in crypto—especially with assets like Bitcoin and Ethereum.
Key Market Crashes: Reactions and Lessons
The May 19 Crash: Week One of My Crypto Journey
I had just entered the market with an investment of around $12,000 when the May 19 crash hit. Instead of panicking, I saw it as a buying opportunity, inspired by stories of the March 2020 rebound. I added another $4,000 to my positions, and within days, the market recovered—leaving me not only back at breakeven but slightly ahead.
What I Did Well:
- Maintained a long-term perspective, focusing on potential growth by the next Bitcoin halving in 2024.
- Avoided meme coins like Dogecoin and Shiba Inu, sticking with major assets like BTC, ETH, UNI, DOT, and FIL.
- Resisted the panic and even bought the dip.
What I Did Poorly:
- Failed to manage allocation properly, underweighting Bitcoin and overweighting altcoins.
- Didn’t realize that—in hindsight—many altcoins would prove far riskier than BTC or ETH.
The June 22 Dip: Erosion of Confidence
After the rebound, the market entered a phase of high volatility that tested everyone’s patience. I watched paper profits of $3,000 shrink to just $500, then turn into a $1,000 loss. I held on, hoping for a rebound, but when it came, I was too hesitant to buy—missing the chance to reduce my losses.
What I Did Well:
- Avoided using leverage or trading futures, limiting my risk.
- Recognized the danger of emotional decision-making.
What I Did Poorly:
- Made decisions based on influencers’ price predictions rather than market analysis.
- Became overly focused on short-term paper gains and losses.
- Let fear override my initial strategy of buying during lows.
The July 20 Decline and Premature Exit
By July, the market felt relentlessly bearish. I held altcoins like Matic that were hit especially hard. After weeks of decline, I finally capitulated during another sharp drop—selling $10,000 worth of altcoins and converting only a fraction to Bitcoin. Almost immediately, the market reversed and began a strong upward trend. I had sold at the worst possible time.
What I Did Well:
- Took a break from obsessive chart-watching, which improved my mental clarity.
What I Did Poorly:
- Abandoned my long-term strategy entirely.
- Tried to time the market, hoping to rebuy at even lower prices.
- Let social media sentiment influence my decisions.
Missing the Bull Market and Chasing Losses
After the July low, the market entered a sustained uptrend—but having just sold, I was too fearful to re-enter. I watched as the assets I’d sold doubled or tripled. When I finally jumped back in, it was near the top. A friend who had simply held his positions ended up in profit, while I was down 20%.
Key Insight:
- Time in the market often beats timing the market. Constant trading and emotional reactions led to underperformance compared to a simple buy-and-hold approach.
The Double Top and Overconfidence
By September, I was convinced the bull market was back. I built a position in Bitcoin around $40,000 and—following influencer advice—also bought FTT, ICP, and AVAX. As Bitcoin rose, my portfolio recovered, and I grew increasingly confident. I expanded my position to nearly $60,000, even taking out loans to invest in speculative projects like RACA.
At the peak, my paper profits exceeded $20,000—but instead of taking gains, I reinvested into more risky assets. When Bitcoin slid from $69,000, I ignored warning signs and kept believing the bull market would continue. I didn’t sell until Bitcoin hit $46,000.
Lessons Learned:
- Profits aren’t real until you take them.
- Avoid overconfidence and magical thinking—no one can consistently predict market tops.
- 👉 Explore reliable market analysis tools to help avoid emotional decisions.
The Final Blow: Falling for a Scam
Down nearly $40,000, I was desperate to recover my losses. An online contact introduced me to a scheme involving a token called Porsche. Early gains tempted me to invest more, eventually putting $10,000 into the project. Shortly after, the developers pulled liquidity, and the token crashed to zero.
Hard Truths:
- If something seems too good to be true, it almost always is.
- Never invest borrowed money in high-risk assets.
- Trust yourself—not “insider” tips from strangers.
Conclusion and Moving Forward
My journey from skeptic to overactive trader was both humbling and educational. I broke nearly every rule of sound investing: I traded emotionally, ignored risk management, and abandoned my own strategy. Although the financial loss was significant, it taught me to respect the market’s unpredictability and focus on continuous learning.
Today, I’m focusing on education, risk management, and patience. The path to recovery will be long, but with discipline and a clear strategy, it’s possible to rebuild.
Frequently Asked Questions
What is the biggest mistake new crypto investors make?
New investors often let emotions drive their decisions—buying during FOMO peaks and selling during panic dips. Establishing a clear strategy and sticking to it is essential for long-term success.
How important is portfolio allocation?
Extremely important. Overweighting altcoins or speculative assets can lead to significant losses during market downturns. A balanced portfolio with a strong emphasis on proven assets like Bitcoin and Ethereum is generally safer.
Should I use leverage or trade futures?
Leverage and futures trading amplify risk and are not suitable for beginners. Most inexperienced traders lose money using these tools. Focus on spot trading and long-term holding initially.
How can I avoid scams like rug pulls?
Stick to well-known projects with transparent teams and strong community support. Avoid tokens that promise guaranteed returns or rely on vague “insider” information.
Is it possible to recover from major losses?
Yes, but it requires patience, discipline, and a commitment to learning. Avoid the temptation to chase quick wins—focus on steady, strategic rebuilding.
What resources can help me improve?
Educate yourself through reputable books, courses, and analytical platforms. 👉 Learn to develop a solid trading plan and avoid common pitfalls.