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3 Lessons We Can Learn From the Crypto Trading Hamster

The Motley Fool logo The Motley Fool 10/5/2021 Lyle Daly
3 Lessons We Can Learn From the Crypto Trading Hamster © Provided by The Motley Fool 3 Lessons We Can Learn From the Crypto Trading Hamster A hamster peeking out the door of its cage. © Getty Images A hamster peeking out the door of its cage.

It's simultaneously ridiculous and exactly what you'd expect in the wild world of crypto. Since June, a hamster named Mr. Goxx has bought and sold crypto in his cage's custom-made office.

Two men in Germany (who have chosen to stay anonymous) came up with the idea to see if a hamster could make better investments than humans. Then they went to work building the equipment that would help a hamster make crypto trades.

It starts with a hamster wheel, or in this case, an "intention wheel." When Mr. Goxx runs in his wheel, it cycles through cryptocurrencies. After he has stopped running and chosen a crypto, there are two tunnels he can walk through: One to buy the crypto and one to sell it.

Mr. Goxx has had his ups and downs. He started with 326 Euros, and had lost 7.3% after a month. He rebounded to a total gain of 16.6% at the end of September. Over his first three months, this hamster outperformed the S&P 500 and noted crypto skeptic Warren Buffett. While Mr. Goxx hasn't revealed all his secrets, there are a few valuable lessons we can learn from his success.

1. Have a consistent trading strategy

When you're investing, and especially when you start investing in crypto, you need a gameplan. If you don't have one, you're more prone to emotional decisions, like putting way too much money in a new, overhyped cryptocurrency, or panic-selling during a price dip.

Mr. Goxx does a great job of being consistent in his investments, regardless of market conditions. At the beginning of his career, he always invested 20 Euros per crypto purchase. After making some money on non-fungible token (NFT) sales, he increased that to 50 Euros per purchase.

Many new investors focus entirely on which cryptocurrencies to buy, but it's just as important to decide how much you'll invest, and how often. For example, you could invest $150 per week in the cryptos you like. Some cryptocurrency exchanges offer automatic purchases to make this easier.

A strategy like this helps you stay on track with your investing and not be overly influenced by outside noise.

2. Build a diverse portfolio

This is a common recommendation when buying stocks, and it's also smart when buying crypto. If you build a diverse portfolio with multiple types of cryptocurrency, you won't be wiped out if one fails. And since it's hard to know which cryptocurrencies will be the most successful, buying a variety of coins gives you a better chance of picking a winner.

Mr. Goxx is clearly a hamster who values a balanced portfolio. He has invested in all kinds of cryptos, including:

As you can see, he has money in the market leader in Bitcoin, a decentralized app powerhouse in Ethereum, and a major decentralized exchange in Uniswap, to name just a few. I'm not sure about some of his choices -- even Mr. Goxx won't convince me to buy Dogecoin. But I can't argue with his results.

3. Don't be discouraged by downturns

If you're a crypto investor, you're going to experience downturns; it's just a matter of when. And with the volatility of crypto, it's normal to see your portfolio lose a big chunk of its value overnight.

As challenging as it is, you can't let these momentum swings affect you too much. The best way to not get discouraged is to only buy a cryptocurrency if you believe in its long-term potential.

Even though Mr. Goxx is the picture of success now, he had his growing pains like any other crypto investor. His portfolio had lost money after his first month. Where some would have quit, he stuck with it, made winning trades, and became internationally famous.

There's a lot to like about Mr. Goxx's style of crypto trading. He's consistent, he invests in lots of coins, and he's seemingly immune to pressure. Those are traits worth emulating because they can benefit both hamster and human crypto investors.


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Lyle Daly owns Bitcoin, Ethereum, and Cardano.

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Lyle Daly owns shares of Bitcoin and Ethereum. The Motley Fool owns shares of and recommends Bitcoin and Ethereum. The Motley Fool has a disclosure policy.

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