Common mistakes to avoid when starting out in crypto

Relying solely on the displayed token prices

One of the first mistakes people make when starting out is focusing solely on a cryptocurrency . Many might think, for example, "Bitcoin is too expensive, I'll buy XRP or dogecoin because it's more affordable." This reasoning is misleading. The unit price means nothing in itself: what matters is the total market capitalization, that is, the number of tokens in circulation multiplied by their value.

Therefore, tracking the xrp price without considering the entire market is like analyzing a puzzle piece while ignoring the whole picture. An asset trading at a few cents can represent a colossal market capitalization, while another valued at several thousand euros might be just a small project. It's not the figure itself that matters, but the project's strength, its utility, and its place within the overall ecosystem.

Investing in risky projects, driven by the lure of profit

Many beginners are tempted by low-capitalization cryptocurrencies, attracted by the promise of quick and spectacular returns.

The argument is simple: if a small project is worth only a few million dollars , it would only need to grow a little to multiply its value by 10 or by 100. But this forgets that behind the majority of these projects, there is neither a real market, nor an identified need, nor a viable economic model.

Buying a token of a low-capitalization project is essentially like investing in a fledgling startup: some will become successes, but the vast majority will fail, disappear, or see their token lose all value. Investing solely in this type of asset for the lure of profit is like playing the lottery, without considering the extreme risks involved.

Neglecting safety

Many people discover crypto through centralized exchanges. These are convenient, but they aren't safe havens. Leaving all your savings there is like handing your house keys to a stranger. Recent history has shown that some platforms can shut down or be hacked, making off with users' funds.

The rule is clear: small amounts intended for trading can remain on an exchange, but larger sums must be transferred to a secure wallet. Hardware wallets (cold wallet) are the most secure solution. In addition, a few essential precautions should be taken: enable two-factor authentication via a dedicated app rather than SMS, keep your recovery phrase offline, and never store it in the cloud.

Ignoring these precautions exposes your assets to avoidable risks.

Underestimating transaction costs and mechanics

Another common pitfall concerns fee management. When starting out, it's not always clear that every transaction, exchange, or transfer has a cost. On the most widely used networks like Ethereum , a simple exchange can cost several tens of euros when demand is high. Conversely, some blockchains boast negligible fees, but low liquidity can lead to unfavorable execution prices.

To optimize your transactions, you should compare several options: trading directly on a decentralized platform (DEX), using a centralized exchange ( CEX ), or waiting for a period of lower congestion. This careful consideration helps prevent your profits from being eroded by unforeseen fees.

Lack of vigilance in the face of scams

In the crypto world, scams evolve rapidly. A website with a flawless design can hide a "rug pull," where developers disappear with the money. Some applications ask users to connect their wallets only to then trick them into signing malicious contracts. Beginners should keep one simple principle in mind: never trust appearances alone.

Reading the official documentation, verifying website addresses, and checking the permissions granted to an application are essential steps. A legitimate project has nothing to hide and will never ask you to transfer funds simply to access an interface.

Forget about diversification and portfolio building

Finally, a common mistake is putting all your savings into a single asset, whether it's a trendy cryptocurrency or a project you strongly believe in. Diversification is key to mitigating risk: spread your investments between large-cap stocks, mid-cap projects, and perhaps a small, more speculative portion.

The same logic applies on a global scale: crypto should not represent 100% of one's assets. It should be part of a broader strategy that combines stocks, bonds, or real estate.

Checklist for successful crypto investments

• Clarify your strategy : define an investment thesis and set a realistic time horizon.
• Invest regularly : favour DCA (split purchases over time) and avoid "market" orders on small capitalizations that are too volatile.
• Secure your funds : enable two-factor authentication, separate your wallets (hot wallet for current transactions, cold wallet for storage) and save your seed phrase offline.
• Analyze the fundamentals : don't just focus on the price. Look at the market capitalization, the circulating supply, and the overall tokenomics of the project.
• Remain cautious about yield : avoid poorly managed leverage and beware of high APYs that are not based on any solid explanation.
• Control your costs : understand how gas fees work to avoid having your earnings reduced.

FAQ

What portion of my capital should I allocate to crypto?

Start modestly. Gradually increase your exposure as you master the technical risks (security, transfers, DEX/CEX) and then the financial risks (volatility, correlations, liquidity).

Should I keep my funds on an exchange or in a wallet?

Use an exchange for your buying and selling transactions, but store your assets in a personal wallet, ideally a cold wallet. This is the fundamental principle of self-custody: your keys, your funds.