7 Important Cryptocurrency Lessons from 2018 - What Did We Learn?

7 Important Cryptocurrency Lessons from 2018 - What Did We Learn For 2019?

Take profits

Whenever investments go up it is important to regularly take profits since you never know when the bull market ends. The top priority would be to make enough profits to cover your initial investment so you can recover your money and still have money invested in funds.

This was probably the main lesson in 2018 - a lot of people had significant profits that were never realised because they were scared the price would increase further and they would miss out on 'free money'

This should be a valuable lesson for the future - don't be afraid to sell some of the assets for profit - as long as you still have some investments left it's a win win situation. If it goes up more then you have 'free money' if it goes down you can buy back cheaper.

Markets are unpredictable and move in circles

We have seen several times that markets grow in bubbles and negative bubbles. Year 2017 and 2018 were great examples of seeing the cycles in action.

This is not the first time we saw this happening with 2014-2015 also coming to mind (even though that situation was less extreme) it was still similar to the one we had recently. The lesson for the future here is that whenever there is a steep/rapid growth we should be aware that it will probably be followed by rapid decrease.

However after the rapid decrease the market can be considered 'oversold' and in 'negative bubble' meaning at some point the valuable cryptocurrencies should recover (not all of them though)

ICOs are usually losing money

Investing in ICOs was extremely beneficial in 2016 and 2017 since most of the time tokens would generate very significant income due to fomo (fear of missing out) once they hit exchanges.

This situation changed during bear market with majority of the ICOs actually starting to lose money. There were several reasons for that but ultimately it came out to the fact that people were dumping the tokens they bought on the exchange. Then there's also the fact that market was oversaturated with ICOs.

This means that investing into ICOs isn't simply worth it anymore and it's better to just hold Bitcoin or Ethereum instead. I personally don't think this will change in 2019 and the trend will continue.

Don't keep tokens on exchanges

One lesson from 2018 was that keeping tokens on exchanges. This is applicable not only to 2018 - we have seen many times in the past that storing tokens on exchanges is simply not worth it.

We had several cases where the exchange was hacked or did exist scam where they took all of the funds for themselves. This means that any funds that you store on the exchange are not actually yours because they can be lost.

If you don't trade tokens then there is no reason to store them on the exchange and simply storing them in your own wallet where you own private keys is much better. Make sure you backup all keys.

Bitcoin vs Altcoin movement

As we have seen in the past Bitcoin tends to outperform altcoins when the market is doing worse. This is the trend we have seen multiple times as visible during 2018 where even though Bitcoin lost a lot of value it still did much better than any altcoins.

However during the bullmarket altcoins usually generate way more hype and as a result increase by more when the market is doing fine.

Ideally when you expect market struggling you should invest into stablecoins instead but if you don't want to do that Bitcoin is better than altcoins. Alternatively if the market is doing super well switching to good and established altcoins is a good option.

Scams in cryptocurrency

2018 also highlighted how many scammers there are in cryptocurrency. We have seen several different scams some of them obvious and some of them pretty well hidden.

Apart from obvious scams like dodgy exchanges or obvious ICO cash grabs I also expect a lot of 'soft exist scams' where developers from the ICO are releasing basic and barely working product and announce they have finished the roadmap. I think this will be a case for a lot of projects in 2019.

Something to be vary as an investor. Invest only in projects that actually move forward with the development and will not stop working on the project once they release some basic product.

Using 2018 to predict 2019

Ultimately even though there are some ways to predict market movement at the end of the day there are too many possibilities of either manipulation or simply market movement through fomo or fud.

As I mentioned before the markets move in the circles and while it is unclear whether this is the bottom most coins already lost between 80-95% from the ATH so this is something to consider. This is because just like decreases are expected after increases it also works the other way and after long period of bear market the odds of bull market increase.