Table of Contents:
Entering the Industry with 100,000
Aiming for 10 Million
10 Million Nearly Zeroed
From 250,000 to 5 Million
5 Million Almost Zero Again
From 500,000 to 2 Million
Some Reflections on My Investments
1. Investment is a Discipline
2. Investment is a High-Risk Operation
3. How to Avoid Risks
4. The Two Major Irrational Demons in Investment: Greed and Fear My Investment Advantages
With 100,000 to enter the industry, I am a lonely volcano, coming from a technical and gaming background. In 2017, I accidentally entered the crypto space when Bitcoin had just broken the 10,000 yuan barrier.
In the following four years, I experienced multiple explosions and multiple near-zero situations.
With many ups and downs, it's inevitable to have some thoughts, which I would like to share with everyone for mutual inspiration and learning.
Like many friends who just entered the industry, I also knew nothing at first, basically buying whatever coins my friends in the industry recommended. At that time, my friends recommended two coins: one was NEO, then called Antshares, and the other was BTS, which was a public chain created by the famous EOS founder BM.
Newcomers definitely dare not invest too much money at the beginning, so I started with 100,000 yuan to test the waters. At that time, domestic exchanges still allowed fiat deposits and withdrawals, money could be deposited into the exchange's corporate account, and the trading pairs on the exchange were all in RMB. The profits from trading coins could be directly withdrawn to personal bank cards. I really miss that time.
My first recharge was at 'Bit Era', which was then the leading exchange for altcoins.
After topping up, how much to invest in each project? After careful research, I found that Antshares was developed by a Chinese team and had a mediocre reputation at the time; on the other hand, BTS was a project from industry giants abroad. BTS could not only issue coins on-chain like ETH but also had its own internal exchange, similar to the later largest decentralized exchange on ETH known as 'Yide'.
Before the explosion of ETH, BTS seemed to be a god-level project. So I decided to invest 90,000 in BTS and 10,000 in NEO, at that time BTS was around 2 yuan, and NEO was under 8 yuan.
However, later the fierce bull market arrived, and NEO skyrocketed to over 1,000 yuan, rising more than 100 times, leaving BTS far behind. I caught NEO at its peak, which was the first hundredfold coin I held in the crypto space, where 10,000 directly turned into over 1 million; so exciting!
But, I didn't sell at the high, then the bear market hit, and it fell back to twenty or thirty yuan. Although I still made a profit, the roller coaster ride was even more thrilling! What happened to the NEO I held all along? I'll talk about that later.
Hitting 10 million, I made money from the first wave of testing the waters, and it seemed quite easy. Coupled with my technical background, I quickly understood Bitcoin and blockchain fundamentals. I felt I had already grasped the industry. After some time observing the market, I found that almost all coins were rising, and even if a coin didn’t rise in the short term, it would definitely rebound later. Since this is the case, why not buy all the coins?
Thus, my confidence gradually grew, and I began to increase my capital investment.
At that time, there were more than 30 altcoins on Bit Era, and I bought 5,000 yuan of each. In the group, they jokingly called me the market leader because as long as they looked at the changes in my total account assets every day, they knew whether the entire market was rising or falling.
Of course, in the context of a bull market, it was basically always rising. Just when I thought I had found the secret to making money and was feeling smug, the market suddenly faced a major correction, about a 40% decline.
Because I held too many coins, I couldn’t sell them in time during the drop, so it was my first loss.
At this point, I finally became a bit clearer: investment still requires serious research on projects; I can't just mess around because making money seems easy.
After taking a loss, I became much more cautious and didn't increase my investment significantly until the industry faced a major reshuffle in 2017. At that time, the government found that the crypto market was too overheated, and after ETH matured, ICO fundraising became nearly mad, with lower and lower standards!
So, on September 4, 2017, seven central ministries and commissions jointly issued a document ordering all domestic exchanges to close within a deadline, and all previous ICO fundraising had to be refunded. In an instant, the domestic crypto market felt as if it had been struck by lightning, and many believed the crypto space was completely finished.
At that time, all coins plummeted, and some coins went to zero directly. However, this was just the beginning; the key was how to trade in the future.
Thus, many people despairingly cut their losses at the lowest point, and the crypto market experienced the largest handover between the East and West.
However, after I studied the underlying logic of Bitcoin, I firmly believed that the significance of Bitcoin's birth was to counter the modern fiat currency system. If one believes that any government can completely strangle Bitcoin, then they might as well not participate!
So, after careful consideration, I decided to rush in on the last day before the exchanges closed, throwing in 1 million yuan in principal to buy Bitcoin at the bottom. We believe that Bitcoin will not only rise again but that the issues of deposits and withdrawals will definitely be resolved by someone; it’s really not a problem.
The last deposit was still at Bit Era, which was the last well-known exchange to close at that time. An era ended with its demise. So how does a new era begin? Two words: Binance!
Binance was a new type of coin-to-coin exchange that started in 2017, where all trading pairs were tokens, such as NEO/BTC. I remember at the beginning, there weren't even stablecoins like USDT available. If both NEO and BTC dropped at the same time, it would be a disaster!
Actually, I wasn't optimistic about this model at first, so I didn't participate in the private sale of Binance's platform token BNB at around 20 cents. Later, BNB did indeed break the issue price when it was launched, and CZ was ridiculed during a live broadcast!
Oh, by the way, many people think that the trading platform token model was pioneered by Binance, but it wasn't. Bit Era already had platform tokens; it's just that Bit Era's platform token was a dividend model, while BNB adopted a burn model.
Although Binance didn't start off well and seemed to be somewhat out of sync with the industry mainstream, heaven favored it. When the 94 crackdown came, all of Binance's main competitors were administratively shut down! Moreover, since Binance was purely a coin-to-coin exchange with no involvement in fiat business, it faced much less policy pressure. Additionally, since CZ is a Canadian-Chinese, if things really went south, he could just go abroad to continue operating, which is why Binance has always remained open and never complied with the policy to close down.
During a month or two of vacuum, almost all remaining retail investors in the Chinese crypto market could only trade on Binance. This led to an explosive growth in Binance's user base, and the technology at Binance was impressive. During the rapid expansion, there were hardly any major issues, and thus BNB also began to soar.
Seeing this epic opportunity, I couldn't sit still. After carefully studying BNB, I exchanged all my BTC for BNB when it was under 8 yuan. I ended up with about 35,000 BNB. If I had held onto them, at the peak of the last bull market, it could have exceeded 100 million!
The articles I wrote about BNB were praised by many; interested friends can check them out (Using BNB as an example to discuss how to verify value).
Later on, as everyone knows, the industry, as I expected, began to rally once the negative policies ended, and Bitcoin surged from a low of 16,000 yuan due to the 94 policy all the way up to over 100,000 yuan, while other random coins soared even more crazily. BNB peaked at around 150 yuan, NEO even broke a thousand, and Sun Yuchen's TRX skyrocketed from the private sale price of 1 cent to 2 yuan, a 200-fold increase.
At that time, I participated in the TRX private sale on Binance and bought over 10 million TRX. Unfortunately, during the 94 crackdown, I thought that Sun Yuchen was too much of a bluffer and didn't dare to hold onto it, so I returned everything at the original price. In addition, many other projects like Quantum Chain, Gxchain, VeChain, etc., appeared, all of which were tenfold, hundredfold, or even thousandfold increases. The most astonishing was a coin in the Internet of Things called IOTA, which rose by tens of thousands of times. An industry celebrity involved in this project turned 100,000 yuan into tens of billions! These wealth myths sound unbelievable to outsiders; even if one truly made that much on paper, it can't be realized, and only those within the circle can truly believe in the wealth-generating capacity of Bitcoin concepts and the blockchain industry, which far exceeds common sense.
The entire industry became even crazier than before the 94 crackdown. Those closed exchanges rebranded, registered new companies overseas, and reopened, often even more aggressively. Previously, the top three exchanges only dealt with Bitcoin, Litecoin, and a few mainstream coins, but after 94, they all began to imitate the formerly popular Bit Era and the now popular Binance, turning into mixed altcoin exchanges, and the harvesting of retail investors became even more frenzied. During this process, I held onto BNB and rode it from 8 yuan to the peak without selling. When it dropped back to 90 yuan, I finally liquidated, achieving the first tenfold increase in the crypto space, with my wealth skyrocketing. At the height of BNB's rise, I woke up one morning to find my account had gained over a million!
It took me nearly ten years to earn my first million in my previous entrepreneurship, but in just one night, I gained over a million; it was incredibly thrilling. 35,000 BNB valued at several million, and without smashing the market, I took more than two days just to sell! This was also my first lesson in realizing that a huge market cap doesn't necessarily equate to ease of selling in the market. The depth of BNB was considered very good, yet it was still challenging.
After BNB peaked, the overall market began showing signs of a turn, but I still captured a few more waves during the tail end of the market, making about three times on GTC, from 2 yuan to 6 yuan on BTM, from 30 yuan to 90 yuan on EOS, and from 2 yuan all the way up to over 20 yuan on Ripple, eventually bringing my total assets just shy of 10 million! At that time, how high was my spirits? Well, I had already started looking for luxury apartments in Shanghai, haha!
10 million nearly went to zero. While I was still basking in the joy of reaching the ten million mark, the market had quietly turned, and a massive downturn was brewing. But I had completely lost my rationality at that time; earning 10 million was not enough; I wanted to make 100 million. I even started fantasizing about Bitcoin hitting 1 million and NEO reaching 5,000 yuan. My judgment of the market and the setting of goals began to be based on my own needs and desires rather than objective and rational analysis. Looking back calmly, this state was essentially no different from that of a gambler.
I believe those who haven't experienced this will find it unbelievable. Many will say things like, 'If I could make 10 million, I'd definitely cash out early,' but the reality was that most of the people around me who made money, especially those of us who had just entered the market, were in a similar state. Greed is a temptation that most people find hard to resist, and the more one earns, the greedier they become. When they haven't earned much, it's hard for them to believe they would be that greedy.
In the investment field, countless times I've verified a truth: when people are the craziest, it's generally when the crisis is at its peak, and it's also when the most people are losing money. As the money in my hands increased, I also became more aggressive and blind, willing to invest in all kinds of random projects without even bothering to read the whitepapers, just looking at who was endorsing them. At most, I invested in dozens of projects, with the better ones starting at several million.
At the end of the bull market, most people were as crazy as I was, investing in a mess of random projects, even 'Space Chain' came out claiming to use satellites to build blockchain networks. Moreover, these projects required investments through agents, essentially paying people to let them invest. Many of these agents later ran away, which was very frustrating. Just as Bitcoin was about to break the 20,000 USD mark, the market suddenly crashed. This was actually a very dangerous signal, but the vast majority were still immersed in the frenzy of the bull market, believing this was just a correction. Since I had never experienced the fear of being dominated by a bear market, and after losing over 2 million in one night, I was very reluctant. With a pile of projects on hand, even if I wanted to run, it was too late. So, like many newcomers, I chose to play dead, even going so far as to claim, 'Having experienced the storms, I've become indifferent to the ups and downs; this little correction is nothing,' and even mocked the seasoned investors who fled in panic, resembling the new retail investors from the last bull market who laughed at the traditional investors.
The consequences of playing dead can be imagined. When the crypto market rises, it exceeds imagination, and when it falls, it’s equally unimaginable. After dropping 50%, it can still drop another 50%. Although there were rebounds in between, each time it failed to break through the previous high, I couldn't bring myself to sell, and my aversion to loss was very severe. Initially, I always wanted to return to 10 million. Later, as profits retracted more, I felt like it was almost at the bottom and didn't want to cut losses, ultimately sinking deeper.
During the continuous decline, the crypto market was a mess, with all sorts of nonsense: property chains, voting chains, film chains... all kinds of public chains... and a bunch of forked coins from BTC... Those once grand projects, touted to the heavens, collapsed one after another. Some went directly to zero, some dropped 90% and then fell another 90%, and some just ran away. This process was naturally accompanied by many people's bankruptcies and various exposés, with articles and recordings flying everywhere, leaving investors dumbfounded!
However, at the beginning of the bear market, there were still some good projects occasionally. I mainly focused on a metaverse project. Of course, back then, the concept of 'metaverse' didn't exist; it was called 'virtual world', similar to MANA abroad, but MANA could only speculate on land at that time, while this domestic project could be played directly. I knew the team behind this project and believed it was relatively reliable. Plus, I personally really liked the blockchain gaming track, so I focused on participating from the start. I initially invested 200,000 or so, but as the project became more popular, my investment continued to increase, ultimately reaching around 2 million, with the highest paper profit being approximately 5 million.
Why did I invest so much in this project?
There are four main reasons:
1. I believed I understood the team and the gaming track, so I felt more confident and bold in my investments;
2. Because the overall market was already bearish at that time, I gradually sold off many unreliable projects and reinvested in this one, which I personally deemed to have relatively higher certainty; after all, most of the other projects I played were losing money, while this one was profitable. This process lasted a year, ultimately accumulating little by little;
3. This metaverse game was also a lot of fun, and I unknowingly got deeply involved. At one point, in order to complete industrial layout and maintain the guild's reputation, I directly invested over 300,000 yuan to 'fight' someone. Investment made me turn into consumption, and losing money almost became inevitable;
4. In the later stages of the project, that is, after about a year, the token price continued to decline, but after more than a year, I developed many irrational feelings toward this project, always hoping it wouldn't fail and could really realize its grand vision. To this end, I devoted a lot of time, energy, and even money to save it. In the end, investment turned into 'entrepreneurship' for me. This mixed mentality of 'investment + entrepreneurship' was something I experienced for the first time, and I indeed couldn't avoid falling into another pit.
During the continuous decline in token price, I not only didn't sell a single coin but continued to support the price. After investing around 2 million, as the crypto market had already entered a deep bear phase, my funds became unsustainable, and ultimately I was powerless to turn things around.
At the lowest point, my 2 million principal shrank to less than 200,000!
Oh, by the way, I mentioned at the beginning of the article that my first hundredfold coin in the crypto market was NEO, which I bought in my wife's account. Her trading style is to hold firmly.
She bought NEO at less than 8 yuan and has held onto it ever since. Even if it was above 1,000 yuan and she didn’t sell, she still has over 100 yuan now, maintaining a tenfold return. However, due to participating in the metaverse project, she used all her NEO in the game, resulting in a total loss of NEO, becoming her grudge, especially when NEO rose again in the last bull market.
This metaverse project dealt me the heaviest blow during the bear market. Coupled with continuous losses in other projects, at the lowest point of the deep bear market, my account funds plummeted from a peak of nearly 10 million to less than 1 million, and due to liquidity drying up during the bear market, I couldn't cash out everything. I could almost consider it to be zero, and what's even more exaggerated is that during this process, I didn't cash out a single cent! If it weren't for my ability to continue making money outside the market, I might have had trouble making ends meet!
From 250,000 back to 5 million. If the bull market in the crypto world is a fiery, 24-hour non-stop affair, then the bear market is bone-chillingly cold and utterly silent! Many once-stellar projects completely disappeared, and those that barely survived only intermittently issued some operational reports. The big influencers who were once surrounded by crowds during the bull market also collectively vanished, and the WeChat groups that used to be filled with news became silent, even starting to spam ads. I heard that one of the once hottest exchanges only had a daily active user count in the thousands. Many people temporarily left the industry, including myself. After the metaverse project failed, I also tried social e-commerce for a while because, during the deep bear phase, there were truly no profitable opportunities in the blockchain industry, whether in investment or work. This really opened my eyes as a novice investor; I had never imagined such a drastic difference between the bull and bear markets in crypto.
Time reached March 12, 2020. Due to the sudden outbreak of the COVID-19 pandemic, the global capital markets crashed, and Bitcoin couldn't escape the fate of the market, plummeting to historical lows of over 3,000 USD in a short period. Countless people were liquidated, and this event is infamously known in the industry as the '312 Incident'!
The pandemic caused many people to lose their jobs and stay home. I took the opportunity to expand my social e-commerce business, managing a team of over a thousand people. Every day, many people called for consultations, and I was often busy from early morning until three or four in the evening, leaving me no time to pay attention to the crypto market, hence I didn't make any moves. In fact, the 312 incident was the best time to buy at the bottom. According to my trading style, I normally wouldn’t miss such an epic opportunity, just like when I dared to directly invest 1 million at the bottom during the 94 closure.
Here, I derived an experience: it's not necessary to constantly spend too much time focusing on the market when investing; important opportunities and actions are actually few, but one must not ignore the market entirely. Because even if new opportunities arise, a lack of sensitivity to market conditions can lead to missed chances. After I missed the opportunity to buy at the bottom, I was very frustrated, but I didn't dare to chase the highs easily and continued to keep an eye on the market.
From March to November, BTC steadily oscillated and rose, climbing back up from the lowest point of over 3,000 USD to near historical highs of around 13,000 USD. People in the industry know that breaking the historical high generally indicates the start of a new major market, which is the biggest sign that the bull market is returning. Later, with a surge in altcoins, old coins like XRP and Litecoin also soared. I finally couldn't hold back, feeling that the new wave of the bull market had started!
However, due to family reasons, I couldn't move the cash I had on hand when it was urgently needed. I didn't want to miss the big market, so I took out a loan of 200,000 through Alipay and WeChat to buy 100,000 worth of ETH and 100,000 worth of BNB, with ETH at over 500 USD and BNB at over 30 USD. Then I checked all the exchange accounts, and some coins that had previously dropped to near zero were now worth a bit of money. I gathered together another 50,000, which I directly opened contracts on, using 2x leverage to roll over ETH, LTC, XLM, and ZEN.
Rolling over means using profits to continuously add positions, and 2x leverage rolling means maintaining a 2x leverage ratio that would trigger liquidation only if it drops 50%. This method is suitable for early bull markets that keep rising; as long as there isn’t a sudden 50% drop, I wouldn’t be liquidated, thus maximizing returns. And heaven was quite favorable; this new round of the bull market indeed remained very stable, without significant corrections, unlike the previous bull market where there were frequent sharp declines. So I continued rolling, ultimately turning 50,000 into over 1 million. At the peak, BNB broke 600 USD, and ETH reached around 2,000 USD. Then I used a 100,000 principal to leverage 10 times to catch the rise of the meme coin FIL, which directly boosted my total funds to over 5 million!
5 million almost went to zero again. Because I had already experienced one bear market, I understood that investment products can't keep rising endlessly, and being trapped during a bear market is terrifying. Thus, I kept a tight grip on the 'take profit' mentality from the very beginning. When my total funds reached 1 million, I took out 300,000 to pay off the loan and rewarded myself with an extra 100,000 for living expenses. Every day, aside from researching projects and market trends, I thought the most about when I should retreat. If I couldn’t figure it out, I would withdraw in batches. At that time, my plan was good; every time my account increased by 1 million, I would exit a certain proportion. However, when it came to practical operation, the account increased too quickly, creating an illusion that if I just held on a little longer, I could return to the 10 million peak!
Thus, the greedy heart couldn't be suppressed again, leading to another unforgettable scene. On the eve of Coinbase's listing, I sensed that this could be a turning point in this bull market, as this round of the bull market was clearly driven by US capital, and Coinbase's listing was a major hype for US capital and the best exit opportunity. Furthermore, the bull market had also lasted quite a while. If a correction was needed, this would be the best opportunity. So, before Coinbase's listing, I closed all my leveraged positions and converted everything into BNB spot.
Originally, this operation was a rational decision based on foresight; indeed, Coinbase's listing became a dividing line in this market. But regrettably, in the first two days after Coinbase's listing, instead of declining as I expected, the market exploded again. Influenced by the greed of my heart, in order to break the mental barrier of reaching 10 million, I clearly sensed the danger yet still chose to gamble for the last rise. Knowing it might drop soon, I added a stop-loss and leveraged to 10 times, thinking that as long as it rose a little bit more, I could achieve my goal and exit.
However, as expected, the market targeted greedy retail investors like me. Just as I was about to flee, the 519 incident occurred, and the market suddenly crashed. My 10x position was instantly stopped out, and my spot and contract funds were halved immediately. With 200,000 of BNB left, I thought of making a comeback, so I opened a 1.5x coin-based long position to seize the rebound, thinking that even if it didn't rebound, having dropped 30% already, it couldn't possibly drop another 50%, right? But I underestimated the automatic selling power of robots triggered by DEFI liquidation. The market indeed dropped nearly 50% again, and BNB fell by about 75% from its highest point. At the lowest point, if it had dropped another 10 USD, I would have been liquidated completely.
Moreover, during this process, the exchange directly froze, and I couldn't do anything! Although I had been mentally prepared for zeroing out from the first day I started trading contracts, experiencing this scene still left me shaken and my scalp tingling! Fortunately, heaven favored me; it didn't bring me back to square one. When the market rebounded slightly, my account returned to 500,000, and I gradually regained my rationality. At this point, I faced two choices:
1. Psychologically, I couldn't accept the large paper loss, completely giving up like in the previous bear market;
2. To stop in time; even if 5 million became 500,000, as long as I could keep my funds, I wouldn't fear running out of resources. After a bit of hesitation, I chose the latter. I closed all my contract positions and converted everything into BNB spot. Although the later market did rebound, if I hadn't closed my positions, I could have quickly returned to several million, but before the official start of a major rebound, it did indeed experience another drop, falling below my liquidation point. At this time, I was truly grateful and felt a sense of accomplishment. This feeling of overcoming greed was, in my opinion, even more significant than making a few million!
The 500,000 I preserved could be used to buy the dip in a bear market. Even if it rose again, I could always re-enter. The ability to advance and retreat is the choice a mature investor should make. A wise choice may reduce my short-term ceiling, but it can also raise my floor, and the latter is actually more important.
From 500,000 back to 2 million. The last bull market truly ended with a double top structure. During the subsequent major rebound, I saw opportunities and took action again, investing in several star projects such as AXS, SAND, and WEMIX with small positions, all of which brought me around tenfold returns. Blockchain gaming and the metaverse are my areas of expertise and interest, and this wave of market activity was mainly concentrated in these two fields. It felt like heaven was rewarding me once again; my total account funds rose back to over 1 million!
After undergoing two punishments from greed, I no longer dared to be greedy. Firstly, regarding investment levels, this time I didn't dare to go all in on projects I was optimistic about.
Then, regarding taking profits, when Bitcoin rebounded to 55,000 USD, I only kept one BTC spot, while I completely liquidated all other tokens into USDT, locking my account funds around 1.5 million until BTC fell to the lowest point of this bear market, around 15,000. Throughout this process, I didn't make any moves.
However, during this time, I deeply engaged with the first blockchain game that had a large number of real players and consumer support, 'Legend 4'. Initially, I wanted to see if there were opportunities to make money, but as I played, I became addicted and led the NASH guild to compete fiercely with South American players. In a moment of impulse, I invested tens of thousands, proving that there are indeed players who invest in blockchain games.
As a true gaming enthusiast, when I encounter a good game, I simply can't resist the urge to spend! This round of operations brought my capital back to just over 1 million.
After 'Legend 4', I didn't make any significant moves until later when Wemix planned to switch from Klay to its own mainnet, triggering a token issuance storm. It was delisted by four major exchanges and OKEx. After careful research, I found no major problems, so I began to buy gradually, starting at 0.6 USD and buying down to 0.15 (it briefly dipped to 0.12 USD).
Currently, it has risen to 3-4 USD. I started selling in steps from 2 USD, clearing out around 4 USD, averaging a tenfold return, but due to the small position, I didn't become wealthy. Later, I finally waited for FTX to collapse, and Bitcoin fell to over 15,000 USD. I felt like the historical bottom might have arrived, so I decisively bought back one-third of my position in BTC, ETH, and BNB!
Additionally, several small positions I invested in recently have also yielded good returns, ultimately bringing my funds to around 2 million! The dawn of the bull market has once again illuminated the horizon. This is my third bull market experience. This time, I started with 2 million in capital, compared to the last bull market when Bitcoin exceeded 20,000 USD, I only had a capital of 250,000, so I had much more leeway. In the last bull market, I invested 100,000 in ETH, 100,000 in BNB, and 50,000 in contracts.
Among them, 200,000 was borrowed. At that time, I just hoped not to lose money, and making a profit was secondary. In the end, BNB yielded a twentyfold return, taking me to a new level. This is what is commonly said in the investment field: 'Seek the middle ground, and you will attain the top!' To be honest, I didn't expect BNB to rise from 30 USD to around 700 USD!
So in this round of the bull market, my capital is ten times more, and I plan to still adopt the strategy from the last bull market, later choosing an appropriate position to go all in on a few mainstream coins and relax.
20% of my capital will be invested in the blockchain gaming track, which I am currently very optimistic about and skilled in! As for contracts, I won't play this time; the focus of this bull market will be on stability!
Then, if I have extra time and energy, I plan to do something in the blockchain gaming track because I believe the timing for blockchain gaming has truly arrived! It was too early before, as there were no good games, and the next bull market may be too late; many opportunities may have already been seized. This bull market is just right for making moves!
With the emergence of truly engaging blockchain games like Legend, MapleStory, and the blockchain version of Diablo, along with major gaming companies from China, the US, Europe, Japan, and South Korea like Tencent, NetEase, Ubisoft, and Wemade all entering the scene, the quality of blockchain games has significantly improved compared to the previous bull market, even reaching the standards of traditional games. As the vanguard of blockchain landing and applications, this round of the bull market will certainly showcase its real charm like the previous WEB2!
Some reflections on my investments: From starting with 1 million → 10 million → 2 million → 5 million → nearly zero → starting from 250,000 → 5 million → nearly zero again → to 2 million. Over six years in the industry, although I haven’t achieved true financial freedom, I have experienced multiple dramatic ups and downs and will always have some reflections to share with everyone. They may not be entirely accurate, but here they are for your reference.
1. Investment is a discipline. Before entering the crypto space, I can say I had never participated in investing. Sudden wealth due to luck in the absence of personal strength is very dangerous. I have once again proven this truth through personal experience: money earned by luck can easily be lost through lack of skill. In this process, I gradually realized that investment, like entrepreneurship, is a high-risk industry that is inherently deep, and only through practice can true knowledge be gained.
Looking back now, investment is also a discipline, with some fundamental principles that must be followed. Whenever I suffered significant losses, I must have crossed certain red lines in the investment field. First, I jumped through all the major pitfalls, then summarized my experiences, followed by systematic learning of the theories, and finally distilled them into my own framework. I'm not sure if this method is reliable or just the helplessness of lacking talent! Anyway, it seems like I have been going through this process since transitioning from entrepreneurship to investing.
2. Investment is a high-risk operation. Whether in entrepreneurship or investing, the first thing to realize is that this is a high-risk operation! Risks mainly stem from high uncertainty. These uncertainties may come from cognitive blind spots, information barriers, or objective uncontrollable factors.
The combination of high uncertainty and high investment increases the risk level further. For most people, the only effective way to truly control risk is to reduce investment.
Although knowledge payment and various self-media are currently popular, making information sources and cognitive enhancement readily available, in reality, not much of it is useful. Moreover, I have always believed that true understanding must come from practice, otherwise, it is easy to become 'all bark and no bite.'
So I strongly recommend that ordinary people, especially those who are not skilled at making money outside the market, should definitely reduce their investments. This is the most effective way to lower investment risk. If one cannot control their investment, or even adds leverage, the consequences can be severe.
Leverage can severely disrupt one's mindset, and when combined with various pressures, it can lead to mental health issues. This is somewhat similar to entrepreneurship but is less complex since the pressures in investing are relatively singular.
In leveraged situations, if it ultimately ends in failure, it can be disastrous. Many may take years to recover or may even be permanently affected! This is because the impulse to leverage in investing is far greater than in entrepreneurship, and the threshold for participating in investments is much lower than in entrepreneurship, making it easier for ordinary people to fall into investment traps and be cut like chives.
Here, I want to mention an example that many Chinese people have personally experienced but have insufficient awareness of: 'actually, taking out loans to buy a house is the biggest leverage behavior!' But why did many people three years ago not recognize the risks of leverage? Because for decades, housing prices have almost always risen. This is very similar to me trading coins with a direct 10x leverage, where investing 10,000 is equivalent to investing 100,000. If it rises tenfold, I earn a hundredfold, turning 10,000 directly into over a million; it's just too satisfying! In the past, real estate was indeed this enjoyable! As the duration of this increase extended and the number of participants grew, everyone began to let their guard down and even became completely unaware of the risks of leveraging.
Of course, some people may have a fluke mentality, believing the government will never let housing prices fall. Even if they do drop, the government will take responsibility, or else they’ll fight for their rights. This is reminiscent of players who lost money in crypto forming groups to fight for their rights. From an investment perspective, trading real estate and trading cryptocurrencies is essentially no different; the only difference is that most people believe they can understand real estate, with the government backing it, while they can't comprehend Bitcoin, which seems a bit gray.
To be honest, from an investment perspective, taking out a loan to buy a house is essentially the same as borrowing money to trade contracts in crypto; once liquidation occurs, it results in zero, and one still has to pay real-world loans and interest. If there is no repayment ability, it could lead to a complete downfall!
I mentioned real estate to help more people deeply realize that investment and leverage are high-risk behaviors. Any investment field, including real estate, if one has already leveraged without fully understanding it, or even earned a lot of money, is likely just lucky, similar to how I stumbled upon a major market when I first entered the crypto space. If faced with market changes, one may feel very bewildered, losing both principal and interest.
3. How to avoid risks. Only after fully realizing risks and experiencing the negative consequences of those risks can one truly pay attention to how to avoid them. My main experiences are as follows:
1. Avoid going all in. Given that investment has very high uncertainty and significant risks, one shouldn't go all in! There will inevitably be a time when going all in results in a loss. I am the best example of this. Not long after I entered the crypto space, I went all in on BTC and BNB, which quickly pushed my account towards 10 million. However, later going all in on the metaverse project and contracts nearly brought me to zero again. The principle of not going all in is actually a basic common sense in the investment field that many investment elites and books will tell you from the start, but I still made this fundamental mistake.
In reality, new investors usually don’t jump in all at once. I only invested 100,000 at the beginning; the problem is that if small-scale investments yield high returns quickly, the greedy heart is unconsciously released, ultimately devouring rationality and leading to reckless behavior. I am a typical example in this regard, and everyone should take me as a cautionary tale!
2. Use leverage cautiously. Unlike going all in, leverage should be used when appropriate. In the face of relatively certain opportunities, especially during significant upswings, decisively leveraging can potentially elevate one’s position by several levels. Those who began borrowing to invest in real estate twenty years ago belong to this category. However, leveraging is a high-risk operation within high-risk operations. More seriously, when people begin to leverage in a certain investment field, it is certain that this field is in a phase of long-term explosive growth. Everyone sees those around them leveraging and making money, even becoming wealthy, while those who don’t leverage appear out of place. Holding cash or being qualified but not borrowing is seen as the biggest foolishness! For the past few decades, the investment field in Chinese real estate has been just like this. This situation brings many blind followers into investing. They are like I was six years ago, lacking basic awareness of investments. If you try to explain the risks of leveraging to them, they will impatiently tell you that housing prices will absolutely not fall. If you ask why, the answer is simply, 'China will not let real estate prices drop.' Without discussing whether Chinese real estate prices will indeed drop, just the complete lack of awareness of leverage risks already puts one on the edge of a cliff; when and where one falls is just a matter of time!
So how to leverage cautiously?
I believe the three most important points are:
If you want to seize this bull market, it's definitely too late to learn and sell on the spot. It's best if someone can guide you to get started quickly.
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