'Stupid money' Ethereum investor loses over $2M in six months — 3 lessons to learn
An anonymous Ethereum investor has lost more than $2 million trading Ether (ETH) since Sep. 9, 2022, on-chain data shows.
Spotted by on-chain monitoring resource Lookonchain, the "stupid money" trader spent $12.5 million in stablecoins to buy 7,135 ETH after it rallied 10% to $1,790 in September 2022. But a subsequent correction forced the trader to sell the entire stash for $10.51 million.
As a result, the trader lost nearly $1.75 million. Interestingly, waiting and selling at today's price would have resulted in a smaller loss of $1.14 million.
1/ Please don't blindly follow the trend to buy $ETH after the price rises for a period of time, and don't panic sell after the price drops.A stupid money who loses more than 2M $USDC in half a year will tell you how dangerous this behavior is.
The investor's trades reemerged in February as ETH price had risen by approximately 10%. Data shows that $7.65 million in ETH was acquired on Feb. 16, only to sell it eight hours later as ETH price dropped, resulting in a loss of another $324,000.
Traders can use such examples to learn from others' mistakes and reduce their investment risks with proven strategies. Let's take a look at some of the most basic tools that can help reduce losses.
The investor first traded stablecoins for ETH on Sep. 12, just three days before long-awaited transition from proof-of-work (PoW) to proof-of-stake (PoS) via the Merge upgrade.
The Merge, however, turned out to be a "sell-the-news" event. Thus, going extremely bullish on Ether based on one strong fundamental was a poor decision.
Moreover, going all in while relying on one indicator, particularly a widely-anticipated news event, is often a losing strategy, which is why traders should consider multiple
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