Top 10 Reasons Why you are Losing Money in Crypto Market

Top 10 Reasons Why you are Losing Money in Crypto Market

Maybe, seeing many people had been becoming affluent out of nothing through utilizing the financial freedom of the Crypto market, you got influenced and invested in Crypto. But, your investment went bust because you observed an entirely different scenario after investing your money. As a result, you have been at a great loss. You are now puzzled, thinking about why others are making a whopping profit whereas you are a failure, why you are losing money in the Crypto market, and where your mistake is. Don’t worry; we are with you and will beckon at your mistakes through this article. Indeed, we adorned this article with the top 10 reasons for which newbies suffer losses in the Crypto market. So, relish the synopsis of this article ASAP to transform your Crypto portfolio from simple to exponential.

Top 10 Reasons Why you are Losing Money in Crypto Market

  1. Buying Crypto at a high price on the Crypto bull market.
  2. Purchasing Crypto without proper research.
  3. Buying weak tokenonomics-flourished Crypto project.
  4. Nurturing get-rich-quick tendency.
  5. Picking up fundamentally weak projects.
  6. Buying Crypto at a nearby ATH price.
  7. Selecting Crypto based on social media activity.
  8. Buying high marketcap-flourished Crypto projects.
  9. Choosing controversial crypto projects.
  10. Holding Crypto assets on centralized exchanges after buying.

1)     Buying Crypto at a high price on the Crypto bull market

The salient mistake done by most crypto investors is that they buy Crypto projects at the wrong time. Buying Crypto in the bull market means buying it for a high price that lowers your profit-gaining possibility. So, the Crypto bull market is not the best time for buying Crypto. Let’s make it clear with two real-time examples.

1st Example: In the 2021 crypto bull market, bitcoin’s ATH price was $69K (November 10), and the average price was $46K. So, you had to buy Bitcoin at $46K in the 2021 bitcoin bull market. However, coming to the 2022 bear market, you can buy Bitcoin at $19k, which leaves you a possibility of making a profit of more than double.

2nd Example: As of now, the price of Ethereum is less than $1000, whereas its price was at $4900 in the 2021 crypto bull market. So, you can now buy Ethereum at a four to five times less price than in 2021.  

So, what’s the best time to buy crypto to avoid big losses?

  • Crypto Bear Market.

Look, the crypto bear market is the best option for you if you want to avoid big losses as a normal guy because you can buy any crypto project at an average price in the crypto bear market. You can enter the crypto market with your money when you see that you are in the crypto bear market. 

Maybe, now a question is lurking in your mind-

How Can I Understand the Crypto Bear Market as a Newbie?

  • Simply, when the price of most crypto projects remains more than 85% down from their ATHs.

We will discuss this issue in detail at number six.

2)     Purchasing Crypto without proper research

It is one of the core reasons for which a whopping number of crypto investors lose money. Actually, Bitcoin is a highly volatile market, and a majority of the crypto traders think that they are too late to buy Bitcoin. This kind of thought forces them into buying Crypto quickly. Amid this hastening, they even forget to research the market. So, the question is-

What’s the easiest way to research Crypto for the new crypto investors?

i) Check the demand of the project.

ii)  Judge the tokenomics of the project.

iii) Measure the professionalism of the team.

iv) Make sure the project is listed on a regulated exchange.

v) Take into account if the project’s social media activities are updated or not. 

i) Check the demand of the project

Most Crypto newbies are accustomed to this worst practice that after entering the market, they start buying such crypto projects that have no notable use case. For example, we can name Hashgard, which spent a whopping amount of money on marketing and came into the limelight, but in reality, the project has no special use case. This fake project could have created a buzz with its so-called roadmap just because the Defi niche was trendy then. However, Hashgard fell flat later on.

  • Avoid trendy projects that befool crypto investors.
  • Buy such crypto projects that have real use cases, like a decentralized exchange, oracle-type crypto projects, decentralized exchanges for buying and selling NFT, etc.
ii)  Judge the tokenomics of the project

Tokenomics is a very significant issue, and to reap much gain from the crypto industry, you should go for a potential tokenomics-flourished crypto project.

  • Indeed, you can take a concept of the demand and supply position of a crypto project through its tokenomics.

You might have noticed that in this ‘’why are investors losing money in Crypto?- article, the point of tokenomics is at number three. So, we will go into depth discussion about how to read tokenomics in the next point.

iii) Measure the professionalism of the team

A professional team is a crying need in the Cryptocurrency industry. Judge two things before investing in any crypto project-

1)                 Whether the team members fulfill their commitment or not?
2)                 If the team members are active on social media like Telegram, Discord, etc, or not?

Stay apart from those projects the team members of which are not true to the words because investing in such projects will increase your possibility of losing.

iv) Make sure the project is listed on a regulated exchange

Carefully verify whether the crypto project that you are going to buy is listed on a leading exchange. 

  • Especially saying leading exchanges, we are hinting at Coinbase, Binance, FTX & Kraken type popular exchanges because these exchanges enlist any crypto project after ground-up verification.
  • But, we recommend you stay apart from those projects that are listed on one or two unknown exchanges only because these projects are mostly scammed. If you invest in these crypto projects, you are more likely to lose your money.
v) Take into account if the project’s social media activities are updated or not

Avoid crypto projects that are not active on social media(s) like Twitter, Discord, etc. We are saying it because scam projects remain inactive on social media(s).

And potential crypto projects always stay active on social media(s).

3)                 Buying weak tokenomics-flourished Crypto Projects

We kept this reason at number 3 out of 10 because it’s one of the core reasons for which crypto newbies lose money in the crypto industry. Most crypto investors don’t consider the tokenomics part before buying a project, which is a cardinal mistake done by them. Because the thing is that weak tokenomics of any project never pushes a project’s price up. Now, we are going to discuss how weak tokenomics of a niche becomes an obstacle to the way of a project’s price increase.

Top 4 signs to understand a weak tokenomics-flourished crypto project-

  • When the team & advisory board holds the maximum part of the total coin supply.
  • When less than 10% of the total coin supply remains in circulation.
  • When the maximum supply of the coins is infinitive.
  • Crypto projects with a whopping total coin supply.
i)                   When the team & advisory board holds the maximum part of the total coin supply

This point is a burning example for you if you want to buy a faulty project at a glance because, in the case of maximum scam or controversial projects, we see that the so-called team & advisory board occupies a major percentage of the coins based on their tokenomics rule. Now the question is-

What’s the problem if the team & advisory board holds the maximum part of the total coin supply?
  • Price manipulation.

Actually, those team members who hold the maximum part of the total coin supply can anytime dump the price by selling those coins on the market. So, you should completely avoid these projects. According to us, if the team of any crypto project can hold more than 15% coins of that project, then consider the project has weak tokenomics.

ii)                 When less than 10% of the total coin supply remains in circulation

It’s a technical part indeed. If you purchase such a crypto project that has only 3-4% circulating supply, then the project’s price is more likely to dump as its circulating supply is too low. It means the lock period of the coins of that crypto project will terminate soon, and the release of those tokens/coins will start, and then the price will crash. As a result, you are more likely to be the loser from the crypto project.

iii)               When the maximum supply of the coins is infinitive

This is a vital point to consider for identifying a weak tokenomics-flourished crypto project because when a crypto project has an infinitive coin supply; it means the authorities of those crypto projects keep space to increase the coin’s supply intentionally in the future. These types of crypto projects are the burning example of weak tokenomics.

  • You should avoid such crypto projects because when you see the price of crypto projects increase, then you will see the team members of those projects will crash the project by increasing its price. So, avoid these types of weak tokenomics-flourished projects.
iv)               Crypto projects with a whopping total coin supply

Look, we are at the very early phase of the crypto industry, so you should select use case-affluent crypto projects with no whopping amount of coin supply.

  • Because it creates demand slowly, taking lots of time. If you buy such crypto projects at the early phase of the crypto industry that have trillions of total supply, then you will see the price of these projects will increase in slow motion, and the price won’t increase much.   
  • And if you look at the most successful crypto projects, you will see they have a limited amount of coin supply.
  • Let’s teach you a strategy, which is- to detect the actual position of your desired crypto project, you should compare the total supply amount between your buying-desired project and other successful projects under the same niche.

4)                 Nurturing get-rich-quick tendency

You might have seen on social media that people are earning profit in bulk from crypto, which gave birth to a tendency in you to earn huge within the shortest period of time. You are completely in an illusion if you nurture such a get-rich-quick intention. 

  • It’s because earning within a short time from the crypto market is a utopian scheme.  The crypto market runs session by session, so you have to understand which session you are in.
  • The crypto bear market is the best session for buying crypto; contrarily, the crypto bull market is for selling.  It’s the normal but the most effective rule of the crypto market.
  • In the crypto market, the average distance from one bull market to another is four to five years. So, you have to foster the mentality of holding crypto for a long time to reap much gain.
  • You are more likely to grow impatient if you invest in the crypto market with a short-term plan. Consequently, you should evade short-term planning in the crypto market because it’s one of the core reasons why crypto newbies mostly lose.

5)                 Picking up fundamentally weak projects

Picking up fundamentally weak projects is another reason for which crypto newbies lose. Most of the time, crypto newbies can’t identify fundamentally weak projects accurately. So, we are going to discuss the criteria by considering which you will be able to identify fundamentally weak projects.

Top 7 criteria to detect fundamentally crypto-weak projects-

  1. Projects with no real use cases.
  2. When the team of any crypto project is anonymous.
  3. Projects that have no specific roadmap.
  4. Projects that work on a trendy niche, having no purpose-driven intention.
  5. Projects’ inactiveness on social media.
  6. When any crypto project is disrespectful to the opinions of community members.
  7. Those crypto projects that frequently change their roadmaps.

6)                 Buying Crypto at a nearby ATH price

Buying crypto at a nearby ATH price is a notable mistake for which crypto investors, most of the time, are destined to suffer losses. As a result, what we see is after hitting the ATH price, the price crashes. Consequently, when traders buy any crypto project at a nearby ATH price, they confront a massive loss.

Let’s teach you-

At which price level should you buy a crypto project to become profitable?

  1. It’s never recommended to buy such a crypto project which is down from its ATH by less than 50%.
  2. But, you can purchase a crypto project when it is down from its ATH by 65% or even more.
  3. However, if you would like to make the best entry, you should go for such a crypto project that is sunk from its ATH by 85%.
  4. On the other hand, it’s a gain beyond expectation when you find a project down by more than 90% from its ATH.

The aforementioned price-down percentage discussion never means you should make entries randomly just seeing the price-down without considering other qualities. However, we hinted at the price-down of those projects that are fundamentally strong and have high use cases.

7)                 Selecting Crypto based on social media activity

Social media has made our communication easy. But things are not like whatever you see on social media is true rather sometimes social media manipulates our decision. This matter will be crystal clear if you notice the accounts of crypto influencers on Twitter.

  • Most savvy crypto influencers promote ordinary crypto projects for money, and even Bitboy Crypto, the big fish of the crypto industry, is no exception. We have recently uploaded an article where we proved how Bitboy Crypto promoted the fake Libera crypto project for push money.
  • On the other hand, once popular crypto YouTuber Ivan on Tech was seen mightily promoting Chinese scam crypto projects DOS Network & Hashgard. However, when these two crypto projects ended their game scamming, Ivan on Tech pretended as if he had never heard the names of those projects.
  • Actually, we can show you thousands of examples of such bribed-promotional activities. So, never be a blind devotee of any crypto influencer. You will rot in the long run if you buy any crypto depending on any social media post.
  • Whoever suggests you any crypto project, you must run self-research to know whether the project is fundamentally strong or not, whether the team is valid and innovative or not, and how about their tokenomics.

8) Buying high marketcap-flourished Crypto projects

Suppose a race will take place between the fastest snake-titled Sidewinder snake and a 50 kg-weighted Python.

Now guess- who will win the race?

  • Your conjecture must be in favor of the Sidewinder snake.

The Sidewinder snake can move quickly because it is thinner in size. Contrarily, Python can’t move easily due to its bulk size.

The Crypto market well fits this example. A big market cap-affluent project can be 1 to 2 trillion only, whereas a small market cap-flourished project can give you even more than 10X profit. Simply put, a potential crypto project has a 10M market cap, so it can easily reach 100M. But, touching the same milestone is way difficult for a project that has a 1B market cap. Alteration of such a big amount of market cap at the early phase in the crypto market isn’t an easy catch.

9) Choosing controversial crypto projects

Most crypto traders suffer losses just because they buy use case-less controversial type crypto projects. So, you should avoid all controversial crypto projects without any doubt.

  • For example, TRON (TRX). Justin Sun, a controversial personality, is the founder of this project. So, regardless of how much profit TRON gives its holders, traders should avoid investing in this project.
  • So, the synopsis is that traders should avoid all types of controversial projects.

10) Holding Crypto assets on centralized exchanges after buying

Storing crypto assets in the wrong place is the final point to discuss.

Storing your potential crypto project in any centralized exchange after buying means you are still in the danger zone because centralized exchanges are not safe for you.

  • After buying a crypto asset on any crypto exchange, your first and foremost duty is to transfer the asset into your crypto hardware wallet.
  • You are not safe as long as your crypto assets are not stored in your hardware wallet because the authorities of the centralized crypto exchange can vanish your crypto assets anytime.

Through the aforementioned 10 points, we beckoned to the actual reasons for which crypto investors mostly lose from the crypto market. So, turn yourself cautioned by reading these ten points and thus try to reap much profit from the market.


Look, you are losing money in crypto doesn’t mean you own an ill fate rather it refers to that you are in possession of some of the above-defined reasons.  Certainly, you are now well aware of the reasons for your loss if you have already read the above 10 points. Actually, the CryptoOOF team has a massive plan surrounding crypto newbies, and we will upload many interesting topics shortly. So, you can follow our Twitter & Instagram accounts if you don’t want to miss out on those topics.

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