22 Lessons for Crypto Investors in 2022
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22 Lessons for Crypto Investors in 2022
Crypto won't disappear, but your relationships might if you don't nurture them.
Navigating Web3 tides with focused insightsSource: @milesdeutscher
Compiled by: TechFlow
Here are the 22 crypto lessons I learned in 2022.
1. DeFi is the only way forward.
The major collapses this year—FTX, Celsius, BlockFi, Voyager, Genesis—were reflections of human behavior, not flaws in underlying technology.
Today, the need for DeFi has never been clearer.
2. Nothing is too big to fail.
Luna was once a top-five Layer 1, and FTX ranked among the top three exchanges. Never let an entity's size blind you to its vulnerabilities.
If a mechanism has fundamental flaws, scale won’t prevent inevitable collapse.
Which leads me to my next point.
3. If a mechanism is broken, it won’t last—no matter how large it grows.
hosseeb made this point in a recent interview, and it struck me deeply.
Before investing, ensure the mechanism is sound. Don’t let market cap blind you to potential weaknesses.
4. Never HODL blindly.
Regularly re-evaluate your positions.
For example, review your portfolio monthly and ask yourself:
A: Why am I holding this token?
B: If I didn’t own it, would I buy it today?
If your answer to B is no, reconsider your position.
Remember, holding a token equals buying it at that moment (opportunity cost).
5. Algorithmic stablecoins don’t work.
So far, we haven't seen this model succeed over any meaningful period. Every attempt has failed.
UST, Bean, Waves (USDN), USN—just a few examples.
Before investing even a single dollar, fully understand the design of any stablecoin.
6. Not your keys, not your coins.
This famous crypto phrase has once again proven true.
With the collapse of numerous crypto exchanges and CeFi lending platforms this year, self-custody of assets matters more than ever.
Buy a Ledger and store securely—always keep control of your own assets.
7. Timing tops (or bottoms) is impossible.
Nearly everyone who tried to time the top was wrong. Why? Because crypto is subject to macro conditions. No one has an edge on macro.
Implement risk management and stick to strategies that don’t require timing the market.
8. Chase real yield, not fake emissions.
If a project offers you high APY, ask:
- Where does the yield come from?
- Is the yield sustainable?
- Is the strategy delta-neutral or directionally biased?
Seeking real yield should be your priority.
9. Beware of single points of failure (systemic risks).
The entire LUNA mechanism relied on UST adoption. When it depegged, LUNA collapsed.
Recognize when a project depends on a single variable and understand the associated risks.
10. Don’t worship cult figures.
SBF, Do Kwon, Zhu Su—all were praised as geniuses. This blinded many to the flaws in their projects. When they failed, their tokens vanished.
In crypto, no one is untouchable.
11. Rolling over positions isn’t equivalent to taking profits.
I’ve fallen into this trap several times:
1. Opened a 10x leveraged position and made gains
2. Rolled profits into another project with 5x leverage
3. The second token dropped over 50%, wiping out all gains
Now all your hard work is gone.
Define a profit-taking strategy and stick to it.
12. Ecosystem diversification is critical.
You might think you're diversified if you held ASTRO, UST, etc., within the LUNA ecosystem.
Same goes for FTX and SOL.
But when one token collapses, it drags down the rest.
Always identify correlations.
13. Avoid locking up tokens.
Unless your time horizon is very long, prioritize liquidity over extra yield.
I learned this the hard way. Locking tokens is rarely worth it. With the rise of liquid staking, there are now more viable alternatives than ever.
14. Liquidity is king.
Markets always present new opportunities—keep cash on hand so you can act when the time is right.
Now, before every buy or sell, I refer back to my favorite quote.
15. Confirmation bias is your biggest enemy.
PoV: You’re researching a project. You search Twitter—everyone loves it. You join the forum—everyone is bullish. “This must be enough research. It’s clearly a good project.”
No. Take the next step—research the project’s weaknesses.
16. Crypto echo chambers do more harm than good.
Social media like Twitter and YouTube reflect market sentiment. Creators exploit this for clicks.
But reality is, most people are bullish at peaks and bearish at bottoms.
Don’t follow the herd—go against it.
17. Be cautious of “influencers”.
Use Twitter and YouTube as starting points for new ideas—not as the final step in your research funnel.
Many creators in this space have skin in the game. Learn to filter them out and think critically.
18. When multiple signals align on an investment, trust your gut and bet boldly.
This year, I felt strongly about certain projects or narratives but didn’t back my convictions with sufficient capital.
Most of those bets eventually paid off—but I didn’t own enough.
Bet on yourself.
19. Learn from those ahead of you.
There’s immense knowledge on Twitter.
Learn from smarter people and apply those insights to your own trading or investing.
The more you learn, the greater your edge.
20. Don’t invest in crypto alone.
Many of my retail friends left crypto this year due to going solo.
Ways to avoid burnout:
- Join a community
- Form a research group
- Attend conferences and meetups
Your network is everything in crypto.
21. Always stay ahead of the curve.
If you spent this year chasing old narratives, you likely ended up as someone else’s exit liquidity.
Always approach markets with forward-thinking and an open mind.
Perp DEXs, Arbitrum, L2s—examples of breakout narratives this year.
22. There’s more to life than crypto.
Crypto can easily consume you.
This year, I experienced both euphoria and anxiety.
Step back. Take breaks.
Crypto won’t disappear, but your relationships might—if you don’t nurture them.
Though 2022 was tough from a price perspective, it offered invaluable lessons I’ll carry throughout my crypto journey.
If you lost money, consider it tuition.
The power and knowledge you’ve gained will position you well in the next cycle.
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Miles Deutscher
