Like eating, investing is a very personal and variable undertaking. For example, some people skip breakfast, while others consider it the day's most important meal. When it comes to investing, some people happily invest in index funds and ETFs, while others trade cryptos, invest in options, or trade on margin.

And some of our investing habits, like our eating habits, can be very unhealthy and lead to a lower quality of life. Nobody wants to be 200 pounds overweight or 50 pounds underweight, and most people don't want to be broke or devote every waking minute to thinking about money.

And, like dieting, several investing concepts get peddled to us, promising us quick riches, stellar returns, and a more luxurious lower-stress lifestyle. Some work, but a lot of them don't. And I thought this might be a good time to reflect on some of the crypto investing concepts that have cost me a lot of money and provided me with some expensive lessons.

Overrated Concept #1

Locking crypto and expecting consistent returns

Many crypto projects and platforms want you to lock your assets away for extended durations. Conceptually, this should work as it reduces sell pressure when the tokens and assets are locked. However, locking your assets for long periods is usually a risk not worth taking.

Whether it's for increased staking returns, higher yields, or more voting rights, locking your assets in a long-term lock situation puts you in a precarious situation. It strips you of your ability to control your assets and provides the platform with too much authority over your investment.

Here are a few examples where locking my assets long-term has cost me huge sums of money. In July of last year, I discussed my investment in Multichain in the article, Crypto of the Week: Discover This Profitable Crypto Trading at a Discount! I purchased MULTI tokens in the $4-$5 range.

In July, I made a big mistake by locking my MULTI tokens for four years. Initially, my staking rewards were high at around a 60% APY paid in USDC. However, six months later, my rewards are barely 4% APY. Meanwhile, the MULTI token is trading at nearly $9. Had I not staked my assets for four years, I could sell some or all of my tokens at a nice profit. Instead, I am collecting next to nothing from the variable staking rewards.

More recently, I made the mistake of providing liquidity on a DeFi platform, Furio. I was offered a 10% bonus if I locked my liquidity for 90 days. Foolishly, I agreed to this option. Then, the developers adjusted the contract, where my liquidity kept re-locking for 90 days, meaning I couldn't truly withdraw it.

Even Ethereum stakers probably experienced regret when they missed their opportunity to sell ETH at nearly $5000. However, they still have to wait a few months for the Shanghai update to be able to sell, and ETH is trading at much lower prices while their crypto was locked in the staking contract.

Long-term locks assume too much risk and often don't provide rewards commensurate with the risks you have to take. Therefore, I will not lock my assets for extended durations when I can avoid doing so.

Overrated Concept #2

Paying too much attention to crypto influencers

All of the crypto influencers I listen to on YouTube have, for the most part, been completely wrong. But, of course, they will always point out how they were correct and have been one step ahead. But, if they did admit mistakes, people wouldn't be listening to them.

Crypto is such a new space that because someone has survived in the space for five years doesn't make them an expert. I still listen to the influencers to get their perspectives because they have teams that gather good data. I also like getting the narrative peddled to retail.

But we have learned that these influencers have often been paid to promote projects or act in ways that aren't in the best interest of their community. Additionally, most of these influencers aren't crazy smart and happen to be at the right place at the right time with the right clickbait.

I'm not saying all influencers are bad or selling out their communities. But, whenever taking someone's "not financial advice," you always want to think, "if this person is so great, why aren't they just using their strategy to make themselves rich? Why are they trying to convince me to buy this, pay for this service, or use this platform?"

Don't get me wrong. I am a part of this crowd. While I don't consider myself an influencer, I write about projects I am biased about and want to succeed. Unfortunately, many times I am wrong. However, I do my best to write about things I am invested in and explain my reasoning for investing in them.

Overrated Concept #3

Being overexposed to the 10–100X altcoins

A big lesson I took away from my first bull market in crypto was not having any Bitcoin and Ethereum. Instead, I invested primarily in altcoins that boomed during the bull and crashed during the bear. I learned from this mistake, and during my second bull run, I continually accumulated Bitcoin and Ethereum. This has kept me solvent during this bear market.

I invested in many altcoin projects that mooned during the bull market. Unfortunately, I diversified into more high-risk projects or held the coins and now see them sitting at 99% below their all-time highs. Many of these I sold off at the end of last year for tax purposes. In the 2017–2018 bull market, most of the unknown altcoins I held never bounced back in the most recent bull market.

When I should have locked my altcoin gains into Bitcoin, Ethereum, and stablecoins, I invested in higher-risk altcoins and NFT projects. Unfortunately, many of these investments are probably dead or will take a long time to recover.

Two humbling projects I invested in at the peak were OMI and Elephant Money. Unfortunately, I got overexcited about these projects and lost thousands of dollars in a hyped-up narrative I created. Had I kept my gains in stablecoins, Bitcoin, or Ethereum, I'd be in a much stronger, more confident position today.

Key Takeaways

These are overrated concepts. You may completely disagree. And that is fine. Like our eating habits, our investing habits will differ. Perhaps, you invested in Solana at $0.50 and are still way up, even if it's down over 90% from all-time highs. Or, maybe you are earning consistent yields from the long-term locking of your assets. Or maybe, you found an influencer who provides you with alpha that has made you tremendous returns.

But, just as I learned in my first cycle that Bitcoin and Ethereum should be the cornerstone of my crypto portfolio, I have also learned from these overrated concepts in the most recent bull market.

So, what are your thoughts? Do you have any overrated concepts you will avoid on your investing journey? Do you disagree with me and think some of these concepts are underrated? Let me and other readers know in the responses.