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You score $1,000 on a crypto investment. Feels great, doesn't it? Sure, until your favorite TikToker brags about making a million bucks. Suddenly, you feel like a failure and worse, that feeling inspires you to take bigger and riskier bets to catch up, leading to catastrophe. Protect your portfolio from the green-eyed monster of envy with these six reminders.
#1: It’s a Zero-Sum Game
Crypto trading, like stocks, is a zero-sum game. For every winner, there’s an equal and opposite loser (or group of losers). That TikTok “guru” who made a million dollars took it from another guru who lost a million by selling too early. Always remember the losers on the other side of every trade you feel envious about, they'll gladly switch places with you!
#2: No One Brags About Their Failures
Every veteran crypto investor has experienced massive gains and catastrophic losses. It comes with the territory, but many will only brag about their successes, because there’s no money or social cred in admitting defeat. The sad part about hiding failures is that it misleads beginners, who perceive crypto as easy money, when in reality it's anything but. You might also stumble upon amateurs with an impressive win rate: it's only because they're still new. Check-in on them in a few years and they'll have war stories, too.
#3: People Exaggerate (or Lie)
We’ve talked about omitting failures, but online, people do something worse: they exaggerate successes or even lie, inventing fake portfolio photos. I don’t know why they do this, maybe it’s a power fantasy or maybe they like to make others feel bad since their own lives aren't going well, but it’s not uncommon. Take all bragging, especially online, with a grain of salt.
#4: Few Overnight Successes
There's an oft-repeated quote along the lines of "It took me 10 years to become an overnight success." The same is true in crypto. While there are occasional lottery winners, most people who hit it big in crypto did so over the course of years, not days. The big rewards are in longevity, not skill or timing.
#5: They're Playing With House Money
You work hard for your money, but others have so much of it they can afford to take reckless risks, like putting $50,000 each on 10 different small-cap cryptos and then bragging about the one that hit. Crypto is full of early investors who are playing with house money and aren’t as attached to their portfolios as you are to your paycheck; it’s a video game for them. Similarly, there are social media stars whose YouTube earnings are so high they can deduct their wild bets as business expenses.
#6: Few Happy Ending
Okay, so a guru made a million dollars from crypto. Now what? Are they walking away from crypto forever and taking their profits to Mexico? I wish they would! Likely, they’ll fantasize about making 10 million or 100 million dollars and bet bigger and riskier until the market turns and they lose everything. Many aren’t even keeping tabs on their taxes, leading to potential horror stories. Take note: it’s harder to walk away from crypto than it is to make money in crypto!
What to Compare Instead
Rather than comparing yourself to others, we recommend comparing yourself to only two benchmarks: where you were before and where you would be if you only invested in Bitcoin.
Comparing yourself to yourself is a great way to measure progress. If your net worth increased by 20%, then who cares if a friend made 200%. 20% is great and a lot more than what you had before!
Comparing yourself to the price of Bitcoin is good too, because if you’re spending hours researching cryptos, but your portfolio is performing worse than if you just bought Bitcoin, you might be wasting your energy.
Here's one final, bonus comparison: compare yourself to the 96% of the world who doesn't own any crypto. You've come so far and learned so much that will become increasingly valuable over time. Go you, you're doing great!
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