Podcast Notes | KOL Miles: Five Crypto Investment Lessons I Learned After Losing $1.7 Million
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Podcast Notes | KOL Miles: Five Crypto Investment Lessons I Learned After Losing $1.7 Million
Without experiencing the harsh blows of the market, one cannot truly grow into an excellent investor.
Navigating Web3 tides with focused insightsCompiled & Translated: TechFlow
Podcast Source: Miles Deutscher
Original Title: How I Lost $1.7 Million In Crypto (I F*cked Up)
Release Date: February 17, 2025
Background Information
In this video, I will share the five biggest mistakes I've made in my cryptocurrency trading career, along with the valuable lessons learned from them. I'll also analyze common traps that both new and experienced traders fall into within the crypto market, and explain why these costly errors ultimately helped me succeed. My hope is that by sharing my experiences, you can avoid similar pitfalls and become a better crypto trader or investor.
Main Topics Discussed
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Bitcoin (BTC)
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Altcoins
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Altcoin market dynamics
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Latest updates in the altcoin market
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Trading strategies for altcoins
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Projects discussed: BEAM, MODE, AI16Z, LKY, LUNA, LMT, SUNDOG, PEPE
Introduction
Miles:
In the crypto space, most people love to talk about their successes. They enjoy showcasing the huge gains they've made in the market, but few are willing to openly discuss their failures.
But the truth is, my success in the crypto market stems largely from the lessons I've learned through major losses. Even in this current market cycle, I’ve had several setbacks—experiences that remind me again of the core principles required to be a successful investor.
Today, I want to take a different approach—not discussing my five winning trades, but focusing instead on the significant losses I've suffered throughout my crypto journey. These losses represent my biggest mistakes and reveal the recurring "traps" I've fallen into over time. The reason I'm a profitable investor today owes much to the painful experiences I went through in 2021. Even in this current cycle, I've had trades that didn't work out, but these failures have better prepared me to navigate future market cycles—especially the next altcoin bull run—with greater confidence.
Ignoring Market Risk Signals
Miles:
I need to start with my largest loss in the crypto market—Luna. This experience deeply taught me about the psychological trap known as “position bias.” Position bias refers to the tendency to develop a strong subjective belief in an asset's fundamentals simply because you hold a large position and see its price rising. However, this belief often isn’t based on objective analysis but rather on the illusion created by price appreciation. In other words, you may mistake rising prices as proof of improving fundamentals.
It was this position bias that caused me to ignore many warning signs indicating Luna’s fundamentals were deteriorating. I did recognize that algorithmic stablecoins like UST had value due to their scalability and decentralization, but unfortunately, they also carried the risk of depegging (failing to maintain parity with their pegged asset).
Although I remained optimistic about Luna and held significant amounts of both Luna and UST, I was aware of the depegging risk. Yet, I underestimated how likely it was—treating it as a near-impossible event—and thus took no action, or at least delayed acting.
When UST dropped to $0.96, clear warning signs were already present, and I should have cut at least 50% of my position immediately. But due to position bias, I chose to ignore these signals. This mental blind spot ultimately cost me dearly. We all know what happened next—once UST began to depeg, both Luna and UST collapsed to zero.
This massive loss in 2021 severely damaged my portfolio, but it also became a pivotal turning point in my investing journey. In early 2021, I had achieved tremendous gains from Bitcoin. I bought one full BTC at $5,000 in 2019, grew that investment to $500,000, and then saw it rise beyond $1 million during the bull market. However, by 2022, due to extreme market volatility, my net worth shrank from $1 million to just tens of thousands. The emotional toll of going from life-changing wealth to near-total loss was devastating and hard to describe.
I firmly believe that without experiencing such crushing losses, one cannot truly grow into a skilled investor. If you're currently going through similar losses, remember—though the silver lining may not be visible now, these experiences will make you stronger and wiser.
This is precisely why I decided to make this video. Rather than talk about 10x, 50x, or even 100x returns, I’m focusing on my failures, because the lessons within them are what truly matter. My goal is to help you become a better investor, and learning from mistakes is key to achieving that. It’s also why I am successful today—because I keep learning from failure.
Lack of a Clear Stop-Loss Strategy
Miles:
My second mistake was not having a clear stop-loss strategy. I believe this is a common issue for many investors, especially in the highly volatile altcoin market.
Let me use Beam as an example. In this cycle, I held a large position in Beam, but unfortunately, I didn’t set an effective stop-loss. This morning, when I checked my portfolio, I found Beam had dropped to mere cents—despite once being one of my largest holdings.
Looking back, Beam’s price action had already sent warning signals. After its initial peak, the price began forming lower highs and lower lows—clear signs of weakening momentum. Although technically the price remained above the moving average initially, its first break below should have raised serious concerns. Yet, I ignored it, waiting until the price fell further. From the daily chart, I had days, even weeks, to act—but I failed to set a stop-loss in time.
For long-term holds, I usually don’t set a 100% stop-loss, but adjust the threshold based on fundamentals and holding period. For short-term trades, I apply strict stop-losses; for long-term positions, I might allow up to 50% drawdown. But in Beam’s case, I should have at least cut half my position. Even if I missed a rebound, I could have re-entered later when the trend improved.
Therefore, setting stop-losses is crucial, whether for short- or long-term trades. You can use higher timeframes (like weekly or monthly charts) to identify key support and resistance levels as reference points. For example, Solana’s key support is currently around $175—if it breaks below, I’d get concerned. Similarly, Bitcoin’s key support may be around $75K. Even if these levels aren’t reached, pre-defining stop-losses helps us react promptly when the market shifts.
To improve execution, I recommend combining multiple technical indicators—such as moving averages and RSI—to increase accuracy. When high-timeframe indicators trigger, switch to lower timeframes (like daily or hourly) to analyze price action before deciding on a stop-loss.
Here’s a practical tip: set price alerts on TradingView. Simply right-click on a moving average or key support level, add an alert, and you’ll be notified when the price hits that level—ensuring you don’t return to find your assets have crashed while you were away.
Lastly, remember stop-loss strategies aren’t only technical—they can be fundamental too. Luna’s collapse was a classic example of fundamental failure. When markets shift from risk-on to risk-off, changes in fundamentals can also justify exiting a position. Whether driven by technical signals or fundamental shifts, we must stay vigilant and adjust our strategies accordingly.
Here’s an example where I handled stop-losses slightly better—let’s look at MODE. Initially, my trade worked well. I bought at $0.014 in a Discord community, and the price rose to $0.06.
The price showed a clear uptrend. As long as this structure held, the market conditions were favorable. But things changed when the trend broke. When price fell below the trendline and moving average, both signals indicated weakening momentum. These should have caught my attention, but I stayed overly optimistic, thinking it might be a false breakout, so I didn’t act immediately.
In the following days, the situation worsened. The market produced multiple retests, failing to reclaim key support and resistance. Then, the price failed to bounce and eventually broke below previous lows. Throughout this process, there were actually six distinct stop-loss signals—including breaking the trendline, losing support, and complete structural breakdown.
I used a gradual stop-loss approach. For instance, when price first broke the trendline, I reduced 10% of my position; when support broke, another 10%; and when the structure fully collapsed, I trimmed further. This phased exit allowed me to reduce risk gradually instead of dumping everything at once. The benefit? Even if the market rebounds, I retain partial exposure and can re-enter if the trend resumes.
Of course, not every coin respects technical support and resistance. Sometimes, price can blast right through key levels, leaving little time to react. But in most cases, if clear reversal signals appear, acting according to plan is always wise.
I don’t oppose those who invest based purely on long-term fundamentals without stop-losses. If your strategy is to hold long-term and accept the risk of total loss, that’s valid. But the key is being fully aware of the consequences. If you choose notto set a stop-loss, you must mentally prepare for losing your entire investment.
I’ve had similar experiences—like investing in certain memes. My plan was “either go to zero or moon.” Though they eventually went to zero, I accepted it calmly because I had a clear plan upfront.
No matter your strategy, the most important thing is having a clear plan. Even if that plan is “I’m okay losing it all,” it’s far better than having no plan. Unplanned investing leads to emotional decisions—the most dangerous behavior in trading.
Failure to Take Profits Timely
Miles:
The third mistake was failing to take profits timely—probably the most costly error I’ve made over the years.
Different coins have different price targets. Generally, if I’m in profit on a coin, I try to lock in gains as the price rises. But in this cycle, I broke my own rules several times—at my expense.
Two examples stand out. First, between last November and December, I kept preaching on my show: “Take profits when you’re green.” But I myself didn’t follow it—I got too caught up in bullish sentiment. Clearly, the market was hot; November to December was fantastic. Everyone was excited about altseason, and many memes were skyrocketing. Complacency is deadly in crypto—you must act when things happen.
When the market drops, you should act—maybe stop-loss, reduce position, or even buy. That’s a valid move. Or when the market rises, you can raise your stop-loss to protect gains or begin taking profits. But complacency means doing nothing—just letting things unfold passively.
I saw my portfolio numbers climbing and felt a false sense of security, believing the rally would continue. But when the market turned at the end of December, the bubble burst, and my portfolio value collapsed rapidly.
The second example is Lucky Coin. I’ve mentioned this trade multiple times before and analyzed my mistakes in detail. Lucky Coin was a major investment, yet I took zero profits from it. At its peak, my Lucky Coin holdings were worth about $1.7 million—but because I didn’t exit timely, all those gains evaporated. I made zero dollars from Lucky Coin.
There were reasons I couldn’t extract $1.7 million from Lucky Coin. First, I follow a personal rule when discussing a coin: I won’t sell it within 24 hours of publicly mentioning it. This is to avoid accusations of “pump and dump”—publicly hyping a coin and then selling immediately. I consider this unethical and damaging to my credibility as a content creator. So I strictly follow this rule—but it also caused me to miss the optimal profit-taking window.
Additionally, poor liquidity was a major factor. Low-market-cap coins like Lucky Coin typically have low liquidity, meaning it’s hard to sell large positions without crashing the price. Attempting to dump a $1M position at once would likely cause a sharp decline—something I wanted to avoid. So, selling had to be done gradually, possibly over weeks.
Despite these constraints, I still made a fundamental mistake. When I first mentioned Lucky Coin in Discord, it was around $3; when I mentioned it on YouTube, it was already $9. Before that, I hinted at its potential between $4 and $5. Then it surged to $17. And yet, I took no profits.
I was blinded by rapid price increases, wrongly assuming it had more room to run, so I broke my own rules. According to my strategy, when a coin doubles, I should at least withdraw my initial investment to secure my capital. But I didn’t do that this time.
Unfortunately, Lucky Coin later suffered a replay attack and failed blockchain migration, causing its price to plummet. I couldn’t foresee these technical issues—but that doesn’t excuse my failure to take profits. Regardless of future events, once a coin doubles—or triples—securing your initial investment is a smart move.
This experience taught me a deep lesson about the importance of timely profit-taking. When prices rise, if you don’t take profits, you may find yourself unable to exit when the market turns—especially since liquidity dries up quickly. This isn’t limited to memes—even large-cap coins like Beam face liquidity crunches during downturns. When prices fall, the market reacts fast. If you didn’t lock in profits during the rise, regret is inevitable.
From these trades, I learned to adapt quickly and avoid repeating the same mistakes. The key takeaway: Mistakes are unavoidable, but we must learn from them. Ensure today’s mistakes don’t repeat tomorrow.
When you get a 10x gain, remember the lessons from Luna or other failures. When price drops and hits your stop-loss, don’t hesitate—cut it, don’t watch it bleed. Reflecting on past lessons often pushes you to act decisively. Though painful, these experiences kept me grounded this cycle.
Oftentimes, we need to experience similar lessons multiple times before we truly internalize them. It’s like a “scientific experiment”—repeated trials and reflections. Traders make unnecessary mistakes, but with experience, we reduce their frequency. A pro tennis player’s double-fault rate might be 4%, while a beginner’s could be 20%. Similarly, skilled traders aren’t flawless—they just make fewer, smaller mistakes.
The message I want to convey today is: It’s okay to make mistakes—as long as you learn from them and strive to reduce repetition. Whether you’re a newbie or veteran, making mistakes is inevitable, but each one is an opportunity to grow.
Poor Position Sizing
Miles:
The fourth mistake waspoor position sizing.
In this cycle, I sometimes allocated too much capital to a single coin. Over-sized positions made me emotionally reactive, impairing rational decision-making. Conversely, at times I had strong conviction in a coin but didn’t allocate enough capital, missing out on larger gains. This taught me that position sizing is often underestimated.
If there’s one thing you can learn from me, it’s this: in investing, you must do three things—set stop-losses, take profits timely, and practice properposition sizing. These are the pillars of becoming a great investor. When you’re bullish on a coin with strong fundamentals and technicals, ensure your position is reasonable—not so large that a loss triggers emotional distress.
Let me share an example—my Sundog trade on October 28. On October 20, I tweeted that I believed Sundog was poised for a rebound, so I opened a spot position. As my confidence grew, I added a leveraged position—making my total exposure very large.
Initially, the trade went well—price rose over a few days, and I made money. But then it started falling sharply. Since my account had enough margin, I wasn’t liquidated and hadn’t set a stop-loss. But when price hit $0.10, I felt immense pressure. I knew I should exit—but hesitated, unwilling to lock in hundreds of thousands in losses, so I stuck to my view.
Luckily, the market rebounded—from $0.14 to $0.26—and I exited at breakeven. But this experience showed me the risks and psychological burden of oversized positions. No matter how confident you are, never commit too much unless you can fully accept the loss.
Under-sizing is equally problematic. If you have strong conviction in a coin but under-allocate, you may miss out on substantial long-term gains.
My advice: never allocate more than 5% of your total portfolio to a single coin. Keeping positions under 5% helps prevent catastrophic losses. In rare cases, if you’re extremely confident, you can go up to 10%—but only once or twice per cycle.
Also, as a coin’s price rises, its portfolio weight naturally increases. For example, if you start with 4% in a coin and it triples, your exposure jumps to 12%. In such cases, I recommend taking profits. Reduce from 12% to 8%, keep some upside, and withdraw your initial investment so the remainder can grow.
For instance, I made 100x on Pepe. If I invested $20K and it grew to $2M, that would dominate my portfolio far beyond the initial 1%. But as price rises, accept the changing allocation and manage risk by taking profits incrementally.
At one point, Pepe made up a huge portion of my altcoin portfolio. But I took profits gradually during its rise, eventually recovering my initial investment and locking in gains. While nominally it was a 100x from entry to peak, I probably realized only 20x. This is common—even if you catch a 10x move, actual gains might be 4x due to imperfect timing and incremental exits.
But this approach has benefits. If a coin only goes up 5x instead of 10x and then falls, you might still lock in 2x or 3x. While incremental profit-taking may reduce potential upside, it effectively protects capital during downturns. Overall, taking profits is far wiser than holding indefinitely.
Holding Too Many Altcoins
Miles:
Finally, I want to discuss the last mistake: holding too many coins. In 2021, this was my main flaw. Back then, my portfolio held as many as 30 or more coins. I remember holding Solana, plus various DEX-related tokens, proxy tokens, gaming tokens, and multiple L1 projects. Eventually, my portfolio ballooned to 40–50 coins.
When the market turned, managing such a massive portfolio became a nightmare. This cycle, I’ve capped holdings at 20. But even that felt excessive—by November, I realized I still had too many. Not as bad as 40, but around 20, which I now believe is still too high. Ideally, 5 to 10 coins is optimal.
Over recent months, I’ve been actively trimming my portfolio down to a more manageable size. Most of this consolidation happened in the last month. Instead of adding new long positions, I focused on optimizing existing ones. The only exception was during a week of massive market liquidations, when I saw opportunity and briefly increased exposure for solid bounce gains. But overall, my goal is to narrow my portfolio to 5–10 coins, not 20–30.
If you’re holding 20 coins now, it’s not too late to reduce. Fifteen might be acceptable, but honestly, even managing 15 is tough. For each coin, you need to set price alerts and stop-loss conditions—nearly impossible for non-professional investors.
Besides, building deep conviction in a coin isn’t easy. For example, saying you’re bullish on gaming and holding five gaming tokens is fine—but developing strong technical or product-based theses for each becomes much harder. There aren’t many truly high-quality projects in crypto. Upon review, you might realize you only strongly believe in 7 coins, while the other 5–6 are just bets on narratives.
Therefore, I suggest concentrating your portfolio in a few high-conviction coins rather than spreading across many. Reducing holdings allows deeper focus on research and management, improving overall investment efficiency and returns.
With the constant launch of new tokens, this issue is worsening. As altcoin supply grows, liquidity gets diluted—amplifying price swings and increasing overall risk. To reduce risk, cutting down the number of held coins is effective, as it simplifies risk management.
In summary, here are the five core mistakes investors most commonly make this cycle:
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Position bias: Holding irrational attachment to existing investments and ignoring market changes.
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Failing to define invalidation conditions: Not setting clear exit criteria for each investment, leading to expanded losses.
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Failing to take profits: Not gradually securing gains at high prices, missing opportunities to lock in profits.
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Poor position sizing: Allocating capital mismatched with conviction, causing emotional stress or suboptimal returns.
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Holding too many coins: Over-diversifying, making focused management difficult and increasing overall risk.
Conclusion
Miles:
Just as I’ve done in this video, I’ve been honest about my mistakes—now it’s your turn. Write down your own mistakes and the reasons behind them. Once you identify the causes, create a concrete improvement plan and stick to it. Keep this list visible—on your desktop, phone, or printed and posted near your desk. When market emotions run high or low, always remind yourself to adhere to these principles.
To maintain consistency in investing, you must first recognize the problems. Before solving a problem, you must clearly understand what it is. Review these mistakes one by one, reflect on their roots, and develop solutions. You might even think of errors I haven’t mentioned—ones that significantly impact you. Write them down, analyze carefully, and plan your improvements.
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