Five Things I Learned in the Crypto Winter of 2022
Web3 would change the world. I wanted in.
I’m going to be honest, investing in cryptocurrency in 2021 was like scoring the password to a speakeasy. The first time I read about Ethereum, I thought my head would explode. I read the article three times, still not fully understanding it but knowing enough to pay attention.
“Why isn’t everyone talking about this?” That question played ping-pong in my brain.
I sent the article to friends. They didn’t get it either and were not interested.
After a few months of watching the price steadily rise and thinking I was the only sucker missing out on a lottery ticket, I couldn’t take it anymore. I invested in Ethereum (ETH). For months I watched the price increase.
“Sweet. ETH will skyrocket, and I’ll be able to buy a house in Hawaii on the beach while all my idiot friends are stuck at their 9–5 jobs.” The thought floated by like pink cotton candy.
Did I believe that? No, not really. But I knew I was learning about (and investing in) a technology that would change the world, and I wanted in.
The price dipped a little, so I bought more. I was purchasing the future at a discount now, so there was no way I could lose. I bought Bitcoin, too, and some meme coins for fun. My husband followed Luna closely and was psyched by the prospects.
We watched a few Youtubers regularly and sipped our whiskey in the low, warm light of the speakeasy.
At the end of 2021, I even scored a side hustle writing about Web3 and got paid in cryptocurrency. I was still working retail at the time, and my co-workers looked at me as though I spoke Japanese. Sure, it sounded cool, but they had no idea what I was saying.
In May of 2022, with the collapse of Luna, everything changed. Here is what the following crypto winter taught me about investing and the emerging world of Web3.
Diversify
After the Luna crash, I was grateful that we didn’t invest everything into one coin. We seriously thought about investing a lot more than we did.
We got busy with jobs and life and didn’t give it more attention. I also naively thought that Luna had to be a one-off. The Luna crash would be the worst thing we’d see all year.
We were coming off of a massive bull run and I’d collected my first NFT. I was sure there was an explanation, and Luna was a glitch in the matrix. Everything would be fine.
I was wrong.
Only Invest What You’re Okay Losing
My dad is in his seventies. He’s also a colossal crypto-skeptic. I can’t count the times he’s said, “I just don’t get it.” It’s all good. He doesn’t need to invest in crypto. He’s all squared away with retirement plans and traditional finance.
One of his friends invested their entire retirement savings with FTX and lost everything.
It’s heartbreaking.
I’ve always approached investing like gambling. I only invest what I can lose. I’m also not easily swayed by celebrity endorsements of projects that look too good to be true. They’re probably rugs. (Rug is shorthand for the slang, rug-pull which means a project is a scam.)
Beware. Always beware.
Don’t Listen to Celebrities
Newsflash — they don’t know anything. They’re shilling a project to make money and look cool by proximity. Don’t buy it.
FOMO is real, and people get swept up in it. The truth is, most celebrities haven’t done any due diligence to explore the project to see if it’s a rug. It totally could be.
They’re also supposed to disclose if a project is paying them.
Get Your Crypto Off of Exchanges
I’d heard this sentiment a million times over the last year. I didn’t get it. Why? My crypto is fine. Then, FTX collapsed, lifting the fog from my brain.
Oh, now I get it.
Luckily I did not use FTX. But again, that was by chance. When I was a normie, investing for the first time, the thought of a crypto exchange collapsing was beyond comprehension. I thought there was no way.
I’d see more experienced investors telling people to get their Bitcoin off exchanges, and I was like, “Yeah yeah. We’ll be fine.” Rookie mistake. We won’t all be fine and cold storage is your best friend.
My crypto is now in cold storage, owned by me. Only I have the key. I use a Ledger Nano X, but there are other options.
Learn about this and be diligent. It takes time to understand, but cold storage is the way to go if you’re buying crypto or HODLing. I followed a step-by-step tutorial from The Crypto Dad on Youtube.
Follow Multiple Sources
When following and reading about cryptocurrency, tracking multiple sources is crucial. Don’t just follow one Youtuber and listen to everything they say. Feeling a false sense of security is easy because you trust this person. Unfortunately, you could get rugged.
Laura Shin is an excellent resource for crypto news. She’s been in the game for years and is committed to reporting the facts as they unfold.
Fastblocks is the frontrunner in truly decentralized Web3 stories.
Join Twitter spaces. Listen to people talk about crypto and Web3 as a whole. Take your time in finding out who the experts are, and don’t rush to hand your money over.
Crypto is the Way
Even after this harsh winter, I am still inspired by cryptocurrency and Web3. We are still so early. Most people I talk to still don’t understand what Web3 is. It feels like when the internet was first getting started. People were sketched out. Banking online seemed insane.
I remember asking people if they had an email address yet. It’s mind-blowing.
Look at how far we’ve come. We can pay our friends on an app with zero fees.
Change can be confusing. With crypto and Web3 advancements happening so quickly, it can be challenging to keep up. Remember: diversify what you buy, only invest what you’re okay losing, don’t listen to celebrities, get your crypto off exchanges, and follow multiple news sources.
I don’t know what 2023 will look like, and neither does anyone else. But I’m proud to be part of the Web3 community and at the forefront of the future.
- This article not intended as financial advice.
Kit Campoy spent 20 years leading retail teams and now writes about retail, Web3, leadership, and entrepreneurship. Join her community of 8k people and get her LinkedIn Pro Tips for free.
Find more of my Web3 articles on FastBlocks — the first truly decentralized news source.
