Popular influencer Lark Davis is warning that most investors will lose money in spite of rising prices in the crypto markets.
In a recent video, Davis cautions his 194,000 YouTube subscribers that, even in a bull cycle, most investors end up losing their crypto gains in the long term.
As such, the analyst names a few key strategies to hold on to profits and avoid life-ruining losses this cycle.
The prominent analyst observes that most crypto investors fall into a vicious cycle of FOMOing into rallies, and then panic selling on retracements, constantly following crowd mentality and social media hype until they lose most, if not all, of their initial capital.
“Most investors, they will buy the top, sell the bottom, buy the top, sell the bottom, rinse and repeat ’til they’re broke. Here’s a chart from Santiment showing that when the majority of social media sentiment is saying to ‘buy buy buy buy buy’ that it’s actually usually time to sell sell sell sell sell. And that when the majority of social media is saying, ‘Hey it’s time to sell, everything’s going to go to zero!’ that’s actually the time to be buying. And I know it sounds crazy, but this is what the herd does every single freaking time.”
Davis also stresses the need for a clear understanding of the risks one is willing to take on before investing, noting that many traders get “way in over their heads” and get stuck in a project.
With all the complexity and moving parts of the crypto markets, Davis tells his viewers that it is okay to get out of certain coins when it feels like they no longer have a clear upside or value.
In addition, the crypto advocate emphasizes the need to secure your gains by learning how to click the “sell button.”
“Learn how to take profits. This market has a habit of creating lots of short-term paper millionaires. Your coin pumps to the moon like crazy, crazy stuff, you’re suddenly rich, but you never click the sell button, and then six months later your portfolio is down by 90% from your initial investment – all [those] riches gone. Gone! This has happened to so many people in crypto. You have got to take profits. Do not become a victim of your own freaking greed…
Here’s the thing: if you never hit the sell button, you’re never going to realize your gains. You’re never actually going to make a profit. It’s all theoretical until you click ‘sell.’ Make a habit of taking profits. It’s going to help you sleep at night by de-risking your portfolio and also rebalancing your portfolio when you do have these big positions that are pumping like crazy. It’s also going to make sure you’re compounding consistent wins over time, that you’re steadily building your wealth. This is how winning is done.”
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