The 5 fatal mistakes crypto beginners make (and how to avoid them)

November 1, 2025 - Crypto P2P Club

The world of cryptocurrency is both fascinating and intimidating. For every success story, there are dozens of tales of preventable losses. As a beginner, it’s easy to get carried away by the excitement and make costly mistakes.

Here are the 5 most common mistakes we see at the Crypto P2P Club, and how to avoid them to build a solid and ethical portfolio.

Mistake #1: FOMO (Fear Of Missing Out)

FOMO is the number one enemy of the rational investor. It’s that fear of missing out on an opportunity that pushes you to buy a cryptocurrency after it has already exploded by 300% in a week.

The problem: You buy at the top, just before the early investors take their profits, causing the price to drop. You end up with an overvalued asset and losses.

The solution:

• Do Your Own Research (DYOR): Don’t rely on influencers or Telegram groups. Understand the project, its utility, its team, and its tokenomics.
• Have an entry strategy: Define in advance the price at which you are willing to buy and stick to it.
• Think long-term: Invest in solid projects that you are willing to hold for several years, not a few days.

Mistake #2: Neglecting Security (Self-Custody)

Leaving your cryptocurrencies on a centralized exchange (CEX) like Binance or Coinbase is one of the most dangerous mistakes.

The problem: You don’t actually own your assets. The platform holds them for you. In the event of bankruptcy (like FTX), hacking, or your account being blocked, you can lose everything. “Not your keys, not your coins.”

The solution:

• Use a non-custodial wallet (self-custody): This is a wallet where only you control the private keys. Examples: Sahal Wallet, MetaMask, Ledger.
• Secure your recovery phrase: This is the key to your vault. Never store it online (email, cloud, etc.). Write it down on paper and keep it in a safe place.
• Beware of phishing: Never click on suspicious links and never give your recovery phrase to anyone.

Mistake #3: Putting All Your Eggs in One Basket

Enthusiasm for a project can lead you to invest all your capital in a single cryptocurrency. This is a recipe for disaster.

The problem: The crypto market is extremely volatile. Even the most solid projects can drop by 80% in a few months. If you have bet everything on a single asset, you risk losing everything.

The solution:

• Diversify your portfolio: Spread your investments across several types of assets (Bitcoin, Ethereum, promising altcoins, stablecoins).
• Define percentages: For example, 50% Bitcoin, 30% Ethereum, 20% altcoins.
• Rebalance regularly: If an asset takes up too much space in your portfolio, take profits and reinvest in other assets.

Mistake #4: Ignoring Taxation

Many beginners think that crypto gains are not taxable. This is false. In most countries, capital gains from crypto are subject to tax.

The problem: You risk a tax audit and significant penalties if you do not declare your gains.

The solution:

• Learn about the legislation in your country: Each country has its own rules. Consult an expert if necessary.
• Track all your transactions: Use a portfolio tracking tool like Koinly or Waltio to record all your operations (purchases, sales, exchanges).
• Set aside a portion of your gains to pay your taxes.

Mistake #5: Panicking and Selling at a Loss (Panic Selling)

The crypto market is a real test of nerves. Seeing your portfolio drop by 50% in a week can be terrifying. The instinctive reaction is to sell everything to limit losses.

The problem: You sell at the bottom, just before the market rebounds. You turn a latent loss into a real loss.

The solution:

• Only invest what you are willing to lose: This is the golden rule. If you need this money to live, don’t invest it in crypto.
• Have a long-term vision: If you have invested in solid projects, trust them. Market corrections are normal and healthy.
• Do Dollar Cost Averaging (DCA): Invest a fixed amount at regular intervals (e.g., €50 per month). This smoothes your entry price and reduces the impact of volatility.

Conclusion

The path to financial freedom in crypto is fraught with pitfalls, but by avoiding these 5 mistakes, you put all the chances on your side. Education, patience, and discipline are your best allies.

At the Crypto P2P Club, we believe in an ethical, decentralized, and responsible approach to investing. Join us to learn, share, and build a fairer finance together.