In October 2021, I made my first foray into the world of cryptocurrency. At the time, Shiba Inu was all the rage – rising quickly in price and flooding social media feeds with posts about people turning small investments into fortunes. The excitement was contagious. It seemed like everyone around me was diving into crypto, making big profits. I didn’t want to be left out, so I joined the bandwagon.
At first, everything seemed perfect. The app was easy to download, the purchase process was simple, and my $500 investment was now in my crypto wallet. I was ready to ride the wave of profits that seemed inevitable. But within a week, everything changed. The price of Shiba Inu dropped sharply, and so did my investment. To make matters worse, high transaction fees quickly eroded what was left of my portfolio.
What followed was a painful lesson in how crypto investments can go wrong and the importance of approaching the market with caution, knowledge, and strategy. Here’s what I learned from my first experience and how you can avoid the same mistakes.
The Price Drop: Timing, Volatility, and FOMO
When I made my purchase on October 29, 2021, Shiba Inu was priced at $0.00007500 per token. Everyone around me seemed to be jumping on the bandwagon. The token’s price was skyrocketing, and I couldn’t resist the FOMO (fear of missing out). I thought I was getting in at the right time. Little did I know that I was buying right at the peak of the market.
I purchased Shiba Inu with the hope that its price would keep rising. But as we all know, the crypto market is notoriously volatile. Within just a few days, I began to watch in horror as the price plummeted. By November 4, 2021, the price had dropped to $0.00004900, a 35% decline in just a matter of days.
- Initial Buy Price (October 29, 2021): $0.00007500 per token
- Price on November 4, 2021: $0.00004900 per token
- Percentage Loss: 35%
The reality of the crypto market hit me like a ton of bricks. In just one week, my $500 investment, which had bought 6,666,666 Shiba Inu tokens, was now worth only about $325. I hadn’t even factored in the fees yet.
Lesson Learned: Timing matters more than you think. Crypto prices can be incredibly volatile, especially for smaller altcoins and meme tokens. The price can fluctuate drastically, often due to short-term market trends, hype, and speculative buying. If you buy during a price surge, you might end up losing when the market corrects itself. This is why understanding market cycles and avoiding buying based solely on hype is critical.
The High Fees: Hidden Costs That Eroded My Investment
If the price drop wasn’t painful enough, the fees involved in the transaction only added to the loss. At the time, I used Cryptoflex, an exchange that charged a 1.5% transaction fee on all purchases. This seemed like a reasonable fee at first, but I didn’t account for how quickly it would add up.
Let’s break down the numbers:
- Initial Purchase:
- Amount Invested: $500
- Exchange Fee (1.5%): $7.50
- Net Amount Invested: $492.50 (after transaction fee)
Right from the start, my investment was down by 1.5% before I even got the chance to see any gains. I also didn’t anticipate other hidden costs—like network fees and withdrawal fees. The exchange charged an additional 0.5% withdrawal fee when I tried to move my tokens to a personal wallet.
- Withdrawal Fee (0.5% of $325): $1.63
- Amount After Withdrawal Fee: $325.00 – $1.63 = $323.37
So, by the time I checked my wallet, I was left with $323.37, a significant loss not just due to the price drop but also because of the hidden fees that reduced my funds even further.
Lesson Learned: Hidden fees can add up quickly and eat into your investment. High transaction and withdrawal fees can significantly impact your overall returns, especially when the price of the asset is volatile. Always check the full fee structure of the platform you are using before making any purchases.
A Real-World Example of Fee Impact
Here’s a detailed breakdown of how both the price drop and the fees impacted my investment:
- Initial Buy:
- Amount Invested: $500
- Exchange Fee (1.5%): $7.50
- Net Amount Invested: $492.50
- Number of Tokens Purchased: 6,666,666 (500 ÷ 0.00007500)
- Price Decline:
- Price on November 4, 2021: $0.00004900 per token
- New Value of Tokens: 6,666,666 * $0.00004900 = $325.00
- Withdrawal Fee (0.5%):
- Withdrawal Fee: $325.00 * 0.5% = $1.63
- Amount Received After Withdrawal Fee: $325.00 – $1.63 = $323.37
After all the price fluctuations and fees, my initial $500 investment was reduced to just $323.37 – a 35% loss.
This experience taught me that fees are often overlooked by new investors, but they can make a significant difference in the long run. While Shiba Inu was a particularly volatile token, the fees I paid turned what could have been a smaller loss into a much larger one. Always be mindful of the costs involved in any crypto transaction, whether it’s buying, selling, or transferring your assets.
The Reboot: A Smarter, More Strategic Approach to Crypto
This painful experience served as the turning point in my crypto journey. Rather than giving up on crypto, I chose to approach it with more caution, strategy, and long-term thinking. Here’s how I began to rebuild my investment strategy:
- Research Before You Buy: I made sure to fully understand any cryptocurrency I was considering before making a purchase. Instead of jumping into meme coins like Shiba Inu, I focused on more established and well-known coins like Bitcoin (BTC) and Ethereum (ETH). These are less volatile and have a proven track record in the market.
- Choose the Right Exchange: I switched to more reputable exchanges like MEXC, which had better fee structures, lower fees, and more transparent operations. MEXC offers 0% fees on P2P trading, which is a huge benefit for anyone trying to minimize transaction costs.
- Consider Timing: I learned to observe market trends and look for opportunities during corrections, rather than buying during a peak. Timing your entry into the market can help you avoid buying at inflated prices.
- Minimize Fees: I started using P2P trading platforms, which allowed me to bypass exchange fees altogether. MEXC’s P2P platform offers zero fees, giving me more flexibility in how I purchased crypto and ensuring that my investment was not reduced by hidden charges.
Your Action Plan: Avoiding the Same Mistakes
Here’s a step-by-step guide on how to make smarter crypto purchases:
- Educate Yourself: Before making any purchase, research the project thoroughly. Understand what the cryptocurrency does, its team, and its market potential. Stick to well-known coins like Bitcoin and Ethereum when starting out.
- Choose a Secure Exchange: Use exchanges with a good reputation and transparent fees. Look for features like two-factor authentication (2FA) and Proof of Reserves for added security.
- Watch the Market: Monitor market conditions and look for buying opportunities during price corrections. Avoid buying into a market when it’s overheated.
- Minimize Fees: Use exchanges or trading methods that offer low fees. P2P trading is an excellent option for avoiding high transaction costs.
How to Join MEXC
Ready to start your journey in crypto with MEXC? Here’s how to join:
- Sign Up: Head to the MEXC website (MEXC.com) and click on the “Sign Up” button.
- Create an Account: Enter your email address or phone number, create a password, and follow the prompts to verify your account.
- Complete KYC (Know Your Customer): To increase your withdrawal limits and ensure the security of your account, complete the KYC process by providing identification.
- Deposit Funds: Fund your MEXC account via a variety of methods, including bank transfer, credit card, or P2P trading (which has 0% fees).
Mexc offers a number of ways to facilitate your first crypto purchase.
- Start Trading: Once your account is set up and funded, you can begin trading a wide variety of cryptocurrencies, or use the P2P platform for low-fee crypto purchases.
Conclusion: Learning from the Loss
My first crypto investment was a painful but invaluable lesson. I learned that crypto investing isn’t about following the crowd or jumping into the latest trend. It’s about being strategic, doing your research, and understanding both the asset and the platform you’re using.
Today, I’m much more cautious and strategic in my approach. I pay attention to market trends, I choose my platforms wisely, and I make sure that fees don’t eat into my profits. While the price drop hurt, it wasn’t the only factor—I had to deal with the fees too. The combination of these elements made me realize that success in crypto is about long-term strategy, not short-term hype.
Frequently Asked Questions (FAQ)
Q1: How do I avoid high fees when buying crypto?
A1: Choose an exchange with transparent fee structures. Platforms like MEXC offer P2P trading, which allows you to buy crypto without any transaction fees. Also, be sure to research the fees associated with both buying and withdrawing crypto to avoid unexpected costs.
Q2: What is P2P trading?
A2: P2P (Peer-to-Peer) trading allows you to buy crypto directly from another person, bypassing traditional exchange fees. The exchange acts as an escrow service to ensure both parties fulfill their obligations before the transaction is completed.
Q3: How do I protect my crypto after I buy it?
A3: Always move your crypto to a private wallet, especially for long-term storage. Hardware wallets like Ledger Nano X are a safe option to keep your assets secure. Also, make sure to enable two-factor authentication (2FA) on your exchange accounts for added protection.
Q4: Can I still make money if I invest in crypto for the long term?
A4: Yes, many successful crypto investors focus on long-term holding. Established coins like Bitcoin and Ethereum have shown substantial long-term growth. However, it’s important to research the market, avoid emotional buying and selling, and stay patient.
Q5: Is crypto a good investment?
A5: Crypto can be a profitable investment, but it also carries significant risk due to its volatility. It’s essential to do thorough research, only invest what you can afford to lose, and stay informed about market trends.
Ready to make your next crypto purchase a success?
Start your journey today with MEXC, where you can buy crypto with transparent fees, strong security, and full protection. Stay informed, stay strategic, and welcome to the crypto world—done the right way.
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