Common mistakes to avoid when starting out in crypto

Rely only on the displayed prices of the tokens

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

Thus, tracking the xrp price without considering its entire market is like analyzing a puzzle piece while overlooking the bigger picture. An asset priced at a few cents may represent a colossal market capitalization, while another at several thousand euros may be just a small project. It's therefore not the figure itself that matters, but the project's strength, its usefulness, and its place in the overall ecosystem.

Betting on risky projects, for the sake of profit

Many beginners are tempted by low-cap cryptocurrencies, attracted by the promise of rapid 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 100. But this is to forget 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 from a small-cap project is essentially like investing in a fledgling startup: some will become successful, but the vast majority will fail, disappear, or lose their token value. Betting solely on these types of assets for the sake of profit is like playing the lottery, without considering the extreme risks involved.

Neglecting safety

Many people discover crypto through centralized exchanges. They're convenient, but they're not safes. Leaving all your savings on them is like handing over your house keys to a stranger. Recent history has shown that some exchanges can shut down or be hacked, stealing users' funds.

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

Ignoring these precautions exposes your assets to avoidable risks.

Underestimating transaction fees and mechanics

Another common pitfall is fee management. When you're starting out, you don't always realize that every transaction, exchange, or transfer has a cost. On popular networks like Ethereum , a simple exchange can cost several dozen euros when demand is high. Conversely, some blockchains have low fees, but low liquidity, which can lead to an unfavorable execution price.

To optimize your transactions, you need to compare several solutions: carry out an exchange directly on a decentralized platform (DEX), go through a centralized exchange ( CEX ) or wait for a period of less congestion. This vigilance allows you to avoid seeing your profits erode due to poorly anticipated fees.

Lack of vigilance against scams

In the crypto world, scams evolve quickly. A flawlessly designed website can hide a "rug pull," where developers disappear with the cash register. Some apps require you to connect your wallet and then sign malicious contracts. Beginners should keep in mind a simple principle: never trust appearances alone.

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

Forgetting about diversification and portfolio construction

Finally, a classic mistake is to invest all your savings in a single asset, whether it's a trendy cryptocurrency or a project you strongly believe in. Diversification is the key to smoothing out risks: spread among large caps, mid-cap projects, and possibly a small, more speculative portion.

The same logic applies globally: crypto shouldn't represent 100% of a person'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 : favor 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 everyday transactions, cold wallet for storage), and back up your seed phrase offline.
• Analyze the fundamentals : Don't just look at price. Look at the project's market capitalization, circulating supply, and overall tokenomics.
• Be cautious about performance : avoid poorly controlled leverage and be wary of high APYs that are not based on any solid explanation.
• Control your costs : understand how gas fees work to avoid seeing your earnings reduced.

Faq

How much of my capital should I allocate to crypto?

Start small. Gradually increase your exposure as you gain a handle on technical risks (security, transfers, DEX/CEX) and then 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.