DYOR in crypto investing: how not to lose money on wrong decisions

The cryptocurrency market has long earned a reputation as a wild and unpredictable space where inexperienced investors regularly fall victim to scammers and misinformation. According to studies, most losses in the crypto sector occur precisely due to hasty decisions made based on rumors and third-party advice. The principle DYOR (Do Your Own Research) — conducting independent research before investing — has become a universal shield against such mistakes.

Where the DYOR principle originated and why its importance is growing

The roots of the term go back to discussion communities on Reddit and Twitter during the first crypto boom. At that time, thousands of newcomers sought investment recommendations for Bitcoin, Ethereum, Ripple, and other assets. However, a pattern quickly emerged: many reputable commentators promoted certain coins, pursuing personal gain rather than caring about the well-being of their readers.

The wave of losses that followed these disappointments led to the realization of a simple truth: reckless trust in external advice inevitably leads to capital losses. This gave rise to one of the main tenets of crypto culture — every investor must base their position solely on verified facts and their own analysis.

Practical algorithm for conducting DYOR

Step 1. Creating a short-list of assets

Before making investment moves, it’s necessary to identify specific objects of research. It is critically important to use diverse independent sources of information — not limited to official project websites or paid reviews. If information is available exclusively in promotional materials or on the developer’s portal, this is a clear signal to be skeptical.

Step 2. Formulating clear investment goals

The choice of time horizon directly influences the analysis methodology:

• Speculative trades (lasting a few hours to days) require daily monitoring of charts, volumes, and volatility
• Positions for a quarter-year involve serious study of the project’s White Paper, its roadmap, and the development team
• Long-term portfolios (spanning years) require understanding the ecosystem, competitive advantages, and potential for real-world application

Step 3. Calibrating acceptable risk

Determine the maximum amount of losses you are willing to incur on each position. The golden rule: invest only in amounts that will not affect your current standard of living and basic expenses. Capital allocated for housing, food, and medical needs should never be part of a risky asset portfolio.

Step 4. Technical analysis — reading charts

To assess price dynamics, use:

• Platforms with advanced tools (TradingView, CoinMarketCap)
• Data on trading volumes over different periods
• Trend indicators and oscillators (SMA, RSI, MACD, Bollinger Bands)
• Support and resistance levels across various timeframes

Step 5. Fundamental analysis — understanding the essence of the project

At this stage, research:

• Qualifications and experience of the development team — check their previous projects and reputation
• Token economic model — issuance mechanisms, distribution, and burning
• Practical application — does the project solve real problems or is it just empty speculation
• Development activity — analyze commits on GitHub, updates, and community engagement

Current sources for accurate analysis

Here is a basic set of tools for researching crypto assets:

• CoinGecko — a full-featured database of coins and tokens with rankings
• CoinMarketCap — historical data, charts, and listing information
• Glassnode — in-depth blockchain analytics and behavior of large holders
• CryptoPanic — news aggregator from various crypto industry sources

Final conclusion

DYOR is not just good advice — it is the minimum standard of responsible investing in the crypto market. The system is full of opportunities for profit but also brimming with traps for inattentive players. Methodical project research, cross-channel information verification, and critical personal analysis are the foundation upon which successful portfolios are built.

Remember: every investment decision should be made solely based on your own conclusions and data analysis, not under the influence of social media advice or rumors in trading chats.