Buying crypto in India is more popular than ever in 2025. But behind every success story are hundreds of cautionary tales. New investors, driven by hype or misinformation, often fall into traps that cost them dearly. This guide from Giottus highlights 10 of the most common mistakes Indian crypto users make, with real-world insights and verified data to help you invest smarter.

1. Falling for FOMO (Fear of Missing Out)

FOMO is one of the most powerful emotional traps in crypto. Nearly 60% of crypto holders fear missing major price surges, and 58% admit their decisions are driven by that fear. This often leads to buying assets at inflated prices during hype waves.

Instead:

1. Use dollar-cost averaging (DCA) to spread out purchases.
2. Follow a written investment plan.
3. Avoid market-moving headlines without verification.

If you’re new to crypto, check out our beginner’s guide to cryptocurrency.

2. Panic Selling During Market Dips

Crypto volatility can trigger emotional reactions. 63% of crypto holders admit that emotional decisions have damaged their portfolios. Selling during dips locks in losses.

Long-term holding works: Bitcoin has delivered ~170% annualised returns over the last decade and has been profitable 94.5% of the time historically.

Tips:

1. Invest only what you can afford to lose.
2. Set take-profit and stop-loss limits.
3. Turn off the noise during market corrections.

3. Overtrading and Revenge Trading

Crypto’s 24/7 nature fuels compulsive trading. Many users check prices constantly, feeling pressure to act. This leads to overtrading and, worse, revenge trading after losses.

Key triggers: Overconfidence, Greed, Pressure to recover quickly

Avoid by:

1. Setting a maximum number of trades per day
2. Using a trading journal to spot bad patterns
3. Risking only 1–5% of capital per trade

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4. Leaving Crypto on Exchanges

Exchange wallets are convenient but risky. If the platform fails or gets hacked, you may lose access to your assets, and there’s no bank to bail you out.

What to do:

1. Move long-term holdings to a hardware wallet
2. Use exchanges only for trading, not storage
3. Remember: Not your keys, not your coins

5. Ignoring Private Key Security

Your private key means full access to your crypto. Lose it, and there’s no way to recover funds. Yet, many investors don’t back up their seed phrases or secure them properly.

Best practices:

1. Store keys offline (cold storage)
2. Never share keys or phrases
3. Use metal seed backups for fire/water protection

6. Sending Crypto to the Wrong Address

Unlike banks, crypto transactions can’t be reversed. Sending funds to the wrong address is a permanent loss.

To avoid this:

1. Always double-check addresses before sending
2. Start with a small test transfer
3. Use QR codes or a saved address book

7. Falling for Scams and Fake Offers

India lost ₹84.38 billion to scams in 2023. Common scams include:
Fake reward schemes (task-based rewards), phishing sites and deepfake videos of celebrities promoting fake tokens

Also read: How to Spot and Avoid Crypto Scams in 2025: A Guide for Indian Investors

Giottus does not sponsor task-based rewards. Use only https://www.giottus.com and report suspicious activity to [email protected] or call +91-78248 78248.

8. Investing Without Research (DYOR)

Crypto projects come with big promises, but many are hollow. Research shows that over 80% of ICOs have historically been scams.

DYOR checklist:

1. Read the whitepaper carefully
2. Check the team’s background
3. Confirm use cases and tokenomics
4. Look for credible third-party audits

9. Not Using Two-Factor Authentication (2FA)

Skipping 2FA is like leaving your front door open. Many hacks start with compromised passwords. Using a second layer of protection can block most unauthorised access.

Use: Authenticator apps like Google Authenticator and avoid SMS-based 2FA for sensitive accounts.

10. Invest in SIPs, average out losses.

So, not investing in SIPs is a missed opportunity. For example, imagine you start investing INR 5000 per month in an asset that is priced at INR 100,000. If the price of the asset drops to INR 90,000 after your SIP crosses three months, you will get more units of the asset. Subsequently, if the price goes up above INR 100,000, you stand to earn more. So, long-term SIPs actually average-out your losses which happen due to any price roll-backs.  

Also Read: How to Start Trading Cryptocurrency in India

Cryptocurrency investing in India is growing — but so are the risks. With scams, emotional pitfalls, and security threats around every corner, awareness is your best defence.

Stick to verified platforms like Giottus, apply disciplined strategies like DCA, and never stop learning.

Ready to invest smarter? Create your free Giottus account and start building your crypto journey the secure way. Start Investing Now!