How Not to Lose Everything Investing in Crypto – Entrepreneurs Guide

Cryptocurrency has captured the minds of the masses and now even nation-states. Recently, (March 2025) President Donald Trump announced that the U.S. government would be creating a Strategic Bitcoin Reserve.

This week (End of May 2025) Bilal Bin Saqib, CEO of Pakistan’s Crypto Council announced at the Bitcoin Conference that Pakistan would also be creating a crypto reserve.

With the interest in Bitcoin ballooning, the question persists as to how we mere mortals can avoid losing it all in the crypto bull run.

In this article, we look at just that.

Here goes…

Don’t Chase Hype—Do Your Own Research

How Not to Lose Investing in Crypto – Don’t Chase the Hype

The big mistake that many make is they chase the hype. The fear of missing out or FOMO is a real thing.

Do not invest in crypto without doing your own research. Definitely do not invest on the basis of YouTube influencer opinions.

Instead, you should look to:

Investigate the team, technology and tokenomics.

Read the whitepaper (every legitimate project will have this).

Understand what the project does. Is it just speculative fluff or does it solve real-world problems?

Diversify

How Not to Lose in Crypto – Diversify Investments

Don’t make the mistake of “going all in on a crypto”. Going all in, even if it’s Bitcoin, Ethereum or Cardano is extremely risky.

Ensure that you diversify in other asset classes. Diversification means you should also invest in assets outside of crypto. Investing in ten different cryptos is not diversification.

If the crypto market tanks for whatever reason, you could lose everything in hours, even minutes.

Diversification reduces exposure to any single point of failure.

Look at these articles on why entrepreneurs should consider investing in Gold and Silver:

Stick to a Clear Investment Strategy

Stick to a Clear Strategy

Without a clear plan, the volatility of crypto can be scary. When prices drop you may get depressed and when prices pump, high elation and euphoria may set in.

It’s important to keep these emotions in check by setting in advance how you will proceed in the volatile market conditions you will certainly face. Most who do not do this will end up losing money.

Either they will sell and the market will pump shortly after. Or they will hold too long and they will get caught when the crypto plummets.

Have a plan and ensure you stick to it. Know in advance when you will sell and when you will buy.

Write down your plan. Revisit it monthly, not daily.

Only Invest What You Can Afford to Lose

How Not to Lose Everything in Crypto – Invest Only What You Can Afford to Lose

Many fail to do this and end up losing everything. Make sure you are not one of them.

Do not put your life savings into crypto. Ensure you only place money you are willing to lose tomorrow into any crypto. If that means you can only afford to lose and invest ten dollars, then so be it.

Don’t be tempted to “Win big”. Start small and grow over time.

As entrepreneurs, we understand the concept of high-risk and high rewards of our business endeavours. We should treat crypto with the same respect and caution.

Protect Yourself from Scams and Hacks

Protect yourself from Scams and Hacks.

This is a big one. Of course, you should take care of your seed phrases and passwords and avoid clicking on dodgy links.

But the one danger that catches many out is the danger of exchanges. You should never keep all your crypto on a single exchange, especially if it’s unregulated.

Even regulated crypto exchanges like, Coinbase have recently been hacked and held to ransom for millions of dollars. So, there is a genuine threat that your crypto account will be compromised if you do not take precautions.

Furthermore, it is not unheard of that crypto exchanges can go bust and with that all your crypto will vanish into thin air, often overnight. We saw this with the FTX, Sam Bankman-Fried fiasco, and the Voyager, Celsius bankruptcies.

Even the best investment strategy is useless if your funds are stolen. Scams and phishing attacks are rampant in crypto.

Store your crypto on secure wallets that you control. For long-term storage consider a secure hardware wallet.

Don’t Try to Time the Market

Don’t Try to Time the Market

Trying to “buy the dip” or “sell at the top” is futile. Even professional traders get this wrong. If you try to do this you can end up losing a lot, if not everything.

Instead, aim to use automated strategies such as Dollar Cost Averaging (DCA). When you DCA you buy at pre-set intervals regardless of price. For example, you may choose to invest ten dollars a month over 12 months.

The idea behind this is that, over time the price of your chosen asset will average out and you will be less concerned about short-term drops and pumps in the price.

Patience often pays off more than perfect timing.

Beware of Leverage and Margin Trading

Beware of Leverage

Leverage and Margin Trading are methods of multiplying your investment potential by applying a credit line to your investment choice.

So, for example, you may only have ten dollars free to invest in your crypto of choice but some exchanges will offer leverage or margin of 10x, 20x or more. Using this method you would be able to place one hundred or two hundred dollars into your crypto.

Of course, if the crypto plunges you will have to pay back the two hundred dollars and you will be what’s called, “liquidated”.

Remember, crypto can fall and rise very quickly, you can get liquidated even if the price drops for a few minutes or seconds.

With margin or leverage you do not actually hold the crypto, you are just betting on the future price. You are not investing if you use margin or leverage it should be considered gambling and as such you are likely to lose everything.

It goes without saying that you should never take out a loan or use credit to invest in crypto.

Stay Updated—Crypto Moves Fast

Keep Updated with Crypto

Whether it be new regulations, hacks or market conditions you should try and keep updated with anything that can impact the risks associated with your investment.

Of course, you should still stick to your main strategy but ensure you are aware of anything that could impact your strategy negatively.

Being early to the news often gives you an edge over reactive investors.

Tax and Legal Compliance

How Not to Lose Everything in Crypto – Stay on top of Tax and Legal Obligations.

Ensure you fully understand the laws regarding gains on crypto in your jurisdiction.

In many countries, any realised gains are subject to capital gains tax. In other words, if you sell your crypto and make money you may have to pay tax on those gains.

This can catch many unaware and your wins can be wiped out through fines and taxes.

Don’t forget that some jurisdictions have banned crypto trading altogether, so double-check what laws apply in your own country via a lawyer or regulated tax accountant.

Have an Exit Plan

Have an Exit Plan

Set a goal that when reached you will take profits. Whether it’s 2x, or 10x whatever it is you should know when you are going to sell.

If you never sell, all gains are unrealised and effectively do not exist and you could be wiped out tomorrow.

You should consider selling gradually, especially if you are in a jurisdiction where tax may be an issue.

Aim to avoid the ‘Hodl’ hold forever mentality. Set your own expectations for your investments.

Final Thoughts

Entrepreneurs can access life-changing opportunities through crypto. However, it’s important to treat it like any other investment and not like a lottery ticket.

To avoid losing it all you should have a clear investment strategy. Do your own research and try to stay rational and unemotional.

The more discipline you can bring to the high volatility of the crypto world, the more likely your chance of success.

Remember, in crypto, surviving the bear market is half the battle.

The winners are usually the ones who didn’t quit, didn’t panic, and didn’t blow up their portfolio chasing the moon.

Good luck!

***Disclaimer: This article is not financial advice and is given for informational purposes only. Readers should conduct their own research and not invest more than they can afford to lose. Crypto is extremely volatile, and as such can drop in value considerably without notice. You should always seek legal advice to understand if the use or investment in crypto is allowed in your jurisdiction.

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