After nearly a decade in the crypto business, I’ve seen the same investor mistakes repeat across very different markets. Most have one thing in common: reacting to price instead of acting according to a plan.
After nearly a decade of running a Canadian crypto exchange, I’ve watched markets change dramatically. Investor behaviour has changed much less.
I’ve been in the crypto business since 2018. That has meant watching Bitcoin through bull markets, bear markets, new all-time highs, major drawdowns, periods of intense excitement and stretches when hardly anyone seemed interested.
The market changes. The headlines change. The reasons people give for buying and selling change.
Human behaviour changes much less.
Over the years, I’ve watched many investors make variations of the same mistakes. Most of them come back to one problem:
Reacting to the market instead of acting according to a plan.
Here are some of the patterns I’ve seen repeat.
We see this during virtually every major cycle.
Bitcoin reaches new highs and suddenly our offices get busier. The phones start ringing. New investors show up, former customers return, and people start asking the same question:
“Is it still a good time to buy?”
I notice it outside of work too.
Friends who normally never ask me about Bitcoin suddenly want to know whether they should buy some. The funny part is that, in some cases, they’re the same friends who seem to ask me that question every four years.
It’s understandable. Rising prices attract attention.
But there’s a danger when the price movement itself becomes the reason for making the investment.
Someone who had no intention of buying a few weeks earlier suddenly feels an urgency to get in because Bitcoin has gone up. Their underlying view may not have changed. Their financial circumstances may not have changed.
The price changed.
And that changed how they felt.
I’ve seen the other side of this just as often.
Some of the people who are in the greatest rush to buy when Bitcoin is rising can also be the quickest to want out when the market turns against them.
At one end, they’re afraid of missing the opportunity.
At the other, they’re afraid of losing what they put in.
This is how investors can end up doing exactly what they intended to avoid: becoming more enthusiastic after prices have risen and more pessimistic after they’ve fallen.
The common denominator isn’t whether Bitcoin is going up or down.
It’s allowing the price movement to dictate the decision.
That’s why I think one of the most useful questions an investor can ask during a major market move is:
Has something meaningful changed—or am I reacting to the price?
Those are two very different reasons to change a plan.
One of the more concerning behaviours I’ve encountered has nothing to do with choosing the perfect entry price.
It’s position size.
Over the years, I’ve encountered people putting amounts into crypto that concerned me—including people who told us they had remortgaged their homes.
In situations like these, we try to make the risk clear.
Bitcoin is volatile. Its price can fall substantially, and those declines can last longer than someone expects.
Money that might be needed for rent, mortgage payments, family expenses or other obligations in the near future is very different from money someone can genuinely leave invested through a prolonged downturn.
Unfortunately, I’ve also seen what happens afterward.
A customer comes back to sell and says some version of:
“I don’t want to sell, but I need the money.”
At that point, their view of Bitcoin almost doesn’t matter.
Their circumstances are making the decision for them.
It’s easy to increase the size of an investment when you feel particularly confident about what comes next.
But conviction and certainty are two different things.
You can have a well-researched thesis and still be wrong about the direction of the market. You can also eventually be right and still experience a severe decline along the way.
That distinction matters with an asset as volatile as Bitcoin.
One thing I regularly remind people is that Bitcoin does not behave like a conventional broad-market investment. Its price can move dramatically in both directions.
That should factor into how someone thinks about the amount they put at risk.
If a Bitcoin drawdown would force you to sell money you need for something else, the problem isn't necessarily your long-term view of Bitcoin.
The position may simply be too large for your circumstances.
This has led me to one of the most important lessons I’ve taken from watching investors over the years:
The investors who struggle most aren’t necessarily the ones who make the worst predictions. Often, they’ve put themselves in a position where they need their prediction to be right.
Another pattern I’ve seen is the temptation to constantly do something.
Bitcoin rises, so buy.
It rises more, so buy more.
It drops, so sell.
It rebounds, so buy back in.
A few trades later, what started as an investment thesis has become a series of reactions to whatever happened most recently.
I want to make an important distinction here.
There’s nothing inherently wrong with active trading. Some people deliberately trade shorter-term movements and understand the additional timing decisions, costs and tax considerations involved.
That’s a strategy.
Reactive trading is different.
Reactive trading happens when there was no real plan to make the trade until the market created the emotion that caused it.
That distinction can be surprisingly difficult to recognize in the moment.
Doing something can feel like taking control.
Sometimes the more disciplined decision is deciding in advance what would actually justify changing course—and then waiting until that happens.
One of the most common questions in crypto is some version of:
“Should I buy now, or wait for it to go lower?”
I understand why people ask it.
A better entry price means more Bitcoin for the same amount of money. Nobody wants to buy immediately before a large decline.
The problem is that market bottoms are much easier to identify after they happen.
In my previous article, I looked at the timing of Bitcoin’s major historical cycles. There have been interesting similarities between them, and I think those patterns are worth understanding.
But historical patterns are context—not a timetable.
No chart can tell us with certainty that a particular day is the bottom.
Trying to make the entire investment decision depend on finding that exact moment creates another problem: you now need to be right twice.
You need to know when not to buy.
Then you need to know when to get back in.
Some investors deal with that uncertainty by spreading purchases over time rather than making the entire decision depend on a single entry point.
That approach does not guarantee a better return or protect against losses. What it can do is reduce the importance of being exactly right about one particular day.
The larger principle matters more than the particular method:
A strategy shouldn't require perfect timing to survive.
I recently wrote about how I’m thinking about the current Bitcoin bottoming window, including the problem with trying to wait for the perfect entry.
The hardest time to develop an investment strategy is often when the market is already moving quickly.
Excitement and fear are powerful influences.
A plan made beforehand gives you something to compare those emotions against.
That plan doesn't need to be complicated.
Before putting money into a volatile asset, it’s worth being able to answer a few basic questions:
There aren’t universal answers to these questions.
The important part is answering them before a rapidly moving market starts answering them for you.
I’ve watched Bitcoin go through periods of extraordinary optimism and periods when hardly anyone wanted to talk about it.
I've watched people become interested after prices surged and frightened after they fell.
I've seen people make thoughtful decisions that they were comfortable sticking with, and I've seen people put themselves under enormous pressure by committing more money than their circumstances could support.
After watching these cycles repeat, I've become less interested in trying to predict exactly what the market will do next.
Predictions get attention. Behaviour matters more.
You cannot control what Bitcoin will be worth next week, next month or next year.
You can control how much you put at risk.
You can consider whether you'll need that money.
You can decide what would actually cause you to change your thesis.
And you can recognize the difference between responding to new information and reacting to a price chart.
The market will give you plenty of opportunities to react.
Having a plan means you don’t always have to.
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This article is for informational purposes only and does not constitute investment, financial, tax or legal advice. Crypto assets are volatile and involve risk, including the potential loss of principal. Consider your own financial circumstances and, where appropriate, seek advice from a qualified professional.
