How to avoid losing money with Bitcoin and Dogecoin

How to avoid losing money with Bitcoin and Dogecoin - how not to lose money on social media facebook 1024x538Crypto mania passes through here every three or four years. This craze makes only a few people rich, while millions of people lose money. Call it luck or strategy, you may have made money with crypto mania. But remember, you can also lose money. Bitcoin and Dogecoin aren't something long-term investors buy, unless they're super rich like Elon Musk. Microsoft founder Bill Gates also said you should only invest in Bitcoin if you have more money than Musk. And Musk is one of the richest men in the world.

The risk of losing money is greater than the possibility of earning

Never try to time the market, unless you are a whale. In the world of investing, a whale is an investor who trades wholesalers and has the power to move the market. You could say that the rules of cryptography are different, as they are not affected by the economy. But the investment and trading rules are the same for cryptocurrencies and stocks.

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

Too much power in the hands of a few

Dogefather Elon Musk and Tesla CEO (Tesla shares) tweeted in February that "too much concentration is the only real problem." He also agreed to pay these whales fiat money to reduce their Doge properties. Why is concentration a problem? If the whale dumps its coins into the market, the Doge's price could drop.

Concentration is also a risk in the equity market. But then the regulators don't let this concentration of power go unchecked. If a whale acquires a 5% stake in a company, it must disclose the holdings. Also, if a whale tries to buy a company's stock on the open market, the company has regulatory protection.

But since there are no regulatory controls other than market forces in the crypto world, a whale can continue to devour these digital coins. In the blockchain, traders only see the business address of the whale. There is no way to find out who this whale is unless he reveals himself. This is because you don't need a Social Security number to open a cryptocurrency account.

How to avoid losing money from Dogecoin and Bitcoin

Even if he's not the whale, Musk has too much power to influence traders. His recent tweets have reduced BTC and Doge by 30%. Protect your money from Musk's mood swings.

Invest less than 5% of your portfolio in cryptocurrencies. Staying in cryptocurrencies for the long term is not a wise decision. Set a realistic goal you expect from cryptocurrency, and once the price is reached, sell some of your holdings. If you continue to book regular profits, you will recover your contribution and what will remain invested will only be profits.