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How to avoid losing money in the cryptocurrencies Bitcoin and Dogecoin

 How to avoid losing money in the cryptocurrencies Bitcoin and Dogecoin

How to avoid losing money in the cryptocurrencies Bitcoin and Dogecoin

An obsession with cryptocurrencies makes a few people rich, while millions lose their money. Call it luck or beginner strategy, you may have made money in the crypto obsession. But remember, you can also lose this money. Bitcoin and Dogecoin are not something long-term investors will buy, unless they are as wealthy as Elon Musk.

The risk of losing money is higher than the chance to win in the cryptocurrency space

Never try to time market, unless you are a whale. In the investment world, a Pisces is an investor who trades in large quantities and has the power to move the market. You might say that the coding rules are different, because it is not affected by the economy. But the rules for investing and trading are the same for cryptocurrencies and stocks.

How to avoid losing money from cryptocurrencies Dogecoin and Bitcoin

Bitcoin was proposed as an alternative to fiat money, as it gave banks the power to print money. The whole concept of crypto was to distribute the power and let demand and supply lead the market. But the rich are getting richer. Recently, there was news that a whale holds US$22 billion worth of Dogecoin, which is 28% of Dogecoin’s total supply.

Too much power in the hands of a few 
Dogefather Elon Musk tweeted in February that “too much concentration is the only real issue.” He even agreed to pay these whales fiat money to reduce their Doge holdings. Why is concentration an issue? If the whale offloads their coins in the market, the Doge price could crash. 

Concentration is a risk even in the stock market. But then regulators don’t let this power concentration go unchecked. If a whale acquires a 5% equity stake in a company, they have to disclose the holdings. Moreover, if a whale tries to buy out a company’s shares in the open market, the company has regulatory protection. 

But as there are no regulatory controls other than market forces in the crypto world, a whale can keep gobbling up these digital coins. In the blockchain, traders only see the trading address of the whale. There is no way to find who this whale is unless they reveal themselves. This is because you don’t need a social insurance number to open a crypto trading account. 

How to avoid losing money from Dogecoin and Bitcoin 
Even if it is not the whale, Musk has too much power to influence traders. His recent tweets pulled BTC and Doge down 30%. Protect your money from such dips that come from Musk’s mood swings. 

Invest less than 5% of your portfolio in crypto. Staying invested in crypto for the long term is not a wise decision. Set a realistic target you expect from the crypto coin, and once it hits the price, sell some of your holdings. If you keep booking regular profits, you will recover your contribution, and what will be left invested are only profits. 

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