How Fear & Greed Can Be Both Beneficial & Harmful - My Crypto Experience

Most cryptocurrency users have had both happy and sad moments during their journeys. In my cryptocurrency adventure, I've also had a lot of joyful and unhappy times. Crypto has the amusing quality of being more of an emotional game than a strategy one. I learned about this a little late, and I want to share my thoughts as well as the emotions that I think many people have felt and will feel throughout their cryptocurrency journey.

We all adore crypto in one way or another, I personally admire crypto because I have felt absolute delight as well as total despair to the point where I sobbed. You maybe thinking of buying a mansion probably from the profit you've made from your investment, and then the next hour you're already considering how you are going to feed yourself in the next weeks. Yes, many people in the crypto ecosystem have similar stories.

Why is crypto more of an emotional game than a strategy game? It's really fairly simple: most people in the cryptocurrency space make decisions based on their emotions rather than developing a solid plan and executing it. Fear and greed are the two emotions in charge of this. If you don't have complete control over these two emotions, it may be difficult for you to succeed in the crypto market. I'll talk about my own experiences and how they've been beneficial and harmful to me. In the long run, I think the majority of people in the crypto space will always feel remorse, and fear and greed is to blame for this.

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Fear

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One thing we should be aware of is that fear has the power to make or break a person. Fear can be beneficial or harmful. The positive or beneficial aspect of fear is that it is a survival mechanism. The negative or harmful aspect of fear, though, is that it might cause you to miss a lot of good possibilities. In the crypto market, once we notice a downward trend, we panic and sell because we always fear losing our profits and investments. And there's fear of missing out which is always beneficial if we make a proper research.

Allow me to share my experience regarding SUSHI tokens. When the token's price was trading at $3, I first learned about it. A friend encouraged me to invest, but I was skeptical. When the cost reached $10, I turned it down. When it reached $15, I refused. When it reached $20, I made the decision to invest because I thought it would rise to $50 and I didn't want to miss out on the investment opportunity. I didn't do any research, and then boom! traders began to liquidate their holdings, the price began to fall. To cut a long story short, I sold my SUSHI, which I had purchased at a cost of $20 per piece, for $8 each. Big loss

You can see how the fear of missing out has turned out to be harmful, as I lost my investment as a result.

I'll share another incident that happened during the LUNA crash. If you're familiar with the crypto market, you've probably heard of the LUNA crash. A new LUNA was introduced as a result of the coin's forking. There was a trend that the listing of new LUNA will pump the old LUNA (LUNC) and a lot of people were in fear of missing out, including me so I decided to put head. A few days prior to the previous LUNA's listing, I made an investment in it (I acquired it at a very low price), and once the new LUNA was listed, the old LUNA that I had purchased performed remarkably and I made a sizable profit.

You can see how the fear of missing out has turned out to be very beneficial, as it has helped me to make a sizable profit.

You will see that our emotions are what drive the market. In the world of cryptocurrencies, there are comparatively few people who make research or analysis before investing, the majority of people don't give a damn about a project's technical or fundamental details. Because of this, tokens like memes that have no usecases or solid project are making 20X their value whereas a token with a great project and a lot of utility will always struggle to make even 3X its value. The reality is, however, that great projects that are have usecase and solid team always succeed and stand the test of time. This can be seen now has most meme coin or shitcoin has wiped off due to the bear market, and the only tokens standing at the ones with better usecase and solid team.

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Greed

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Humans are naturally greedy. We're always looking for more. Due to their level of greed, people have suffered both great loss and great profit. Greed just like fear can also be beneficial and harmful.

Let's go back to my old LUNA (LUNC) investment, where my fear of missing out paid out. After making a profit, the token dropped, and I made the decision to buy again, this time with my initial investment and profit. After buying I began to imagine what I'll do with the profit the iPhone 13 I would like to purchase, among other things. Lucky the token pump but not as much as the previous one, so I decided to wait and didn't sell. There was a massive dump in the cryptocurrency market and the token dropped below the amount that I bought it, leaving me in loss and this was because of my greednisss.

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You can see how my greed has tend to be harmful as it caused me to lose both my initial investment and my profit; instead of selling when the price of the token pumped as I should have, I held on out of greed (because I wanted more) and ended up losing money.

However, greed can also be more beneficial.. I'll also share one of my crypto experience where greed has tend to be beneficial to me... It was during December time in year 2021, there were a lot of crypto related ponzi and referral scheme. I participated in a Tron smart contract referral activity called FOTRON, where you get rewarded in TRX for each referral and successfully performed task. TRX was trading at $0.03 back then, and I made almost 1000 TRX. It was theoretically free money of $150. (referring and performing task). While most of my friends that also participated sold their TRX, I didn't sell any.

My price target was set at $0.1, and when the price eventually hit $0.1, I didn't sell since I was too greedy and decided to change my selling target to $0.14. Luckily for me, it was a bull market, and all the alt coins were doing great and my target price for TRX was not only met but exceeded. This shows how well my greed pays off significantly..

Moreover, greed and fear are interconnected. Both good and bad things may come out of them.

Yes, both emotions are interrelated and have both beneficial and harmful effects. To support my point, I'll use one of my crypto experiences.

Still on my TRX investment in December 2020. When the price eventually hit my targeted price, I joyfully sold and futher informed two of my friends about it, and they both decided to buy (fear of missing out); they both bought at $0.13 and were anticipating $0.17... They didn't sell when the price reached 0.17 (Greed), the price falls to $0.1, then increases once again to $0.17, out of fear one of them made the decision to sell at 0.175 and was fortunate that the price hit his target, the other had extended his price target to 0.2 and was still awaiting, the TRX price rose to 0.18 and he didn't sell, and that was it.

Due to fear, he sold at a loss when the price started to drop significantly. Later, the price started to rise again and reached $0.17 before falling again. He regretted what he had done. You can see how these two emotions may be both beneficial or harmful since greed prevented him from selling when he was in profit (he wanted more) and fear allowed him to sell at a loss.

That's cryptocurrency for you. Many people, including myself, have experienced both happiness and sadness as a result of cryptocurrencies. The market is drive by fear and greed. What we observe on the market chart is a reflection of our emotions. If a large sum of money is invested in Bitcoin and the price is pumped, BTC's price will pump and other alt coins will follow, the pump will drive a lot people to buy (fear and greed). This happened last year pumped when BTC hit $60k, a lot of people were buying because of fear of missing out, and most of them didn't sell because of greed, they were all anticipating $100k.. BTC eventually hit $69k before it begins to drop.. A lot of people loss their investment and savings because of this fear and greed.

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How Can We Prevent Or Deal With Fear & Greed

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In actuality, the market for cryptocurrencies is driven by both fear and greed. I've described my experiences with both emotions and how they have been both beneficial and harmful. Everyone of us has experienced both gains and losses from these two emotions at some point.

All you need to do to minimize or prevent the harm aspect of both emotions is do thorough research and analysis before investing, only use money you can afford to lose, this in case your thorough research and analysis that failed you.

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Key Takeaway

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In essence, if you want to thrive in cryptocurrency. Have at least two projects you firmly believe in, and continue to spend regularly at any cost. They will recover over time and make you proud; those projects ought to be utility-based. You can invest in any market making news if you have extra cash. Avoid being overly greedy while investing; as soon as you reach your price target, take your profit.

Important Reminder: Don't ever regret your past failed investment, you need to move on and learn from it, this will help you develop your experience and shape you to be a better trader or investor.

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