Six Years in the Cryptocurrency World, Lessons from Losing 20 Million in Investments — Absolutely True, Shared to Alleviate Everyone's Anxiety

Table of Contents:
100,000 to enter the industry
Hitting 10 million
Almost zeroing out 10 million
From 250,000 to 5 million
500,000 was almost zero again
From 500,000 to 2 million
Some of my investment reflections
1. Investment is a science
2. Investment is a high-risk operation
3. How to avoid risk
4. The two biggest irrational demons in investing: greed and fear My investment advantages

100,000 to enter the industry I am a lonely volcano, with a background in technology and the gaming industry. In 2017, by chance, I entered the cryptocurrency space when Bitcoin had just broken through the 10,000 yuan mark.
In the following four years, I experienced multiple explosions and nearly went to zero several times.
With the ups and downs I've experienced, I can't help but share some thoughts here for everyone to inspire and learn from each other.
Like many friends who just entered the industry, I initially knew nothing. Basically, I bought whatever coins my friends recommended. At that time, my friends recommended two coins: one was NEO, which was still called Antshares back then, and the other was BTS, which was the public chain developed by the famous EOS founder BM.
Newcomers certainly don't dare to invest too much money at the beginning, so I initially put in 100,000 yuan to test the waters. At that time, domestic exchanges still allowed fiat currency deposits and withdrawals, and I could transfer money to the exchange's company account. The trading pairs on the exchange were all in RMB, and the profits from trading could be directly withdrawn to personal bank cards. I really miss those days.
My first deposit was at 'Bite Era,' which was the leading exchange for altcoins at that time.
After depositing the money, how much to invest in each project? After careful research, I found that Antshares was developed by a domestic team and had a mediocre reputation at the time; on the other hand, BTS was a project by foreign industry experts. BTS could issue coins on-chain like ETH and had its own internal exchange, similar to the later largest decentralized exchange on ETH called 'IDEX.'
Before the explosion of ETH, BTS looked like a god-tier project. So I decided to invest 90,000 in BTS and 10,000 in NEO, which was about 2 yuan at the time for BTS and less than 8 yuan for NEO.
However, later a crazy bull market arrived, and NEO surged to over 1,000 yuan, increasing by more than 100 times, leaving BTS far behind. I managed to hold NEO to its peak, making it the first hundredfold coin I held in the cryptocurrency space, turning 10,000 into over 1 million. Exciting!
However, I didn't sell at the peak, and later during the bear market, it fell back to 20 or 30 yuan. Although I still made money, this roller coaster ride was even more thrilling! What happened to the NEO I held on to until the end? I'll explain later.
Hitting 10 million The first wave of testing the waters made me money, and it seemed quite easy. Coupled with my personal technical background, I quickly understood Bitcoin and the underlying blockchain technology. I felt I had grasped the industry. After a period of observing the market, I found that almost all coins were rising. Even if a certain coin didn't rise in the short term, it would definitely catch up later. If that's the case, why not buy all the coins?
So I gradually became bolder and started increasing my principal investment.
At that time, there were over 30 altcoins on Bite Era, and I bought 5,000 yuan of each. In the group, they jokingly called me 'Big Market Guy,' because as long as I looked at the changes in my account's total assets every day, everyone could tell whether the market was up or down.
Of course, in the backdrop of the bull market, it was basically always rising. Just when I thought I had found the knack for making money and was feeling smug, the market suddenly faced a major correction, with a drop of about 40%.
Because I had too many coins, I couldn't sell in time when it fell, so I lost money for the first time.
At this point, I finally woke up a bit. Investment requires serious research into projects; I couldn't just mess around because making money seemed too easy.
After suffering a loss, I became much more cautious and didn't increase my investment significantly until the big 94 industry reshuffle came. At that time, the country realized that the cryptocurrency market was too overheated. After ETH matured, the ICO fundraising became almost insane, and the lower limits kept falling!
As a result, on September 4, 2017, seven ministries of the central government jointly issued a document ordering all domestic exchanges to close within a specified time, and all previous ICO fundraising had to be refunded. Suddenly, the domestic cryptocurrency market seemed to be hit by lightning, and many people felt that the cryptocurrency market would be completely finished.
At that time, all coins plummeted, and some coins went directly to zero. But these were trivial matters; the key issue was how to trade in the future.
So many people despairingly sold off at the lowest point, and the cryptocurrency market completed the largest turnover between the East and the West.
However, after studying the underlying logic of Bitcoin, I firmly believed in one thing: Bitcoin was born to resist the modern fiat currency system. If one believes that any government can completely strangle Bitcoin, then they might as well not play!
So, after careful consideration, I decided to rush in on the last day before the exchanges closed, putting 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 big deal.
My last deposit was still at Bite Era, which was the last well-known exchange to close at that time, marking the end of an era. So how does the new era begin? Two words: Binance!
Binance, which started in 2017, was a new type of cryptocurrency exchange. A so-called token exchange means that all trading pairs are tokens, like NEO/BTC. I remember at the beginning, there weren't even stablecoins like USDT; if both NEO and BTC fell, it was game over!
Actually, I was skeptical about this model at the beginning, so I didn't participate in the private placement of Binance's native token BNB, which was around 0.2 yuan. Later, when BNB opened, it indeed broke below the issue price. CZ was livestreaming on Yizhibo at that time and was heavily criticized!
Oh, by the way, many people think that the exchange platform token model was created by Binance, but that's not true. Bite Era already had platform tokens; the difference was that Bite Era's tokens were a profit-sharing model, while BNB was a burning model.
Although Binance didn't start off well and seemed a bit out of sync with the industry mainstream, fate was on its side. The 94 policy came, and within a short time, all of Binance's main competitors were shut down by the authorities! Moreover, since Binance was a pure token-to-token exchange that did not involve fiat currency business, it faced much less regulatory pressure. Plus, CZ is a Chinese Canadian; if things went south, he could just go abroad to continue operating, so Binance kept running and never complied with the policy to shut down.
During a one to two-month vacuum period, almost all the remaining retail investors in the Chinese cryptocurrency market could only trade on Binance. As a result, Binance's user base began to grow explosively. Binance's technology was also very impressive; during its rapid expansion, it consistently avoided major issues. Thus, BNB also began to rise.
Seeing this epic opportunity, I couldn't sit still and after carefully studying BNB, I swapped all my BTC for BNB, which was less than 8 yuan at the time. I exchanged around 35,000 BNB, which could have been worth over 10 million at the peak of the last bull market!
The article I wrote about BNB was highly praised by many people; interested friends can check it out (Using BNB as an example to talk about how to verify value).
The subsequent events are well known; the industry indeed followed my expectations. After the negative policies caused by the government were fully priced in, the market began to surge again. Bitcoin skyrocketed from the 16,000 yuan low during the 94 policy to over 100,000 yuan, and other random coins went insane. I remember BNB peaked around 150 yuan, NEO broke 1,000, and Sun Yuchen's TRX soared from a penny during its private placement to 2 yuan, a 200-fold increase.
At that time, I participated in the TRX private placement on Binance and bought over 10 million TRX. Unfortunately, during the 94 policy, I thought Sun Daxian was too unreliable and didn't dare to hold on, so I withdrew everything at the original price. Additionally, a whole bunch of projects like Quantum Chain, Public Credibility, VeChain, and so on produced a slew of tenfold, hundredfold, or even thousandfold coins, the most astonishing being an IoT coin called IOTA, which surged tens of thousands of times. Industry celebrity Daikongyi turned a 100,000 yuan investment directly into billions! These myths of getting rich will surely make outsiders think it's a scam. Even if the paper profits are so high, it doesn't mean they can cash out. Only those who are in the industry truly believe that the concept of Bitcoin and the wealth-generating ability of the blockchain industry surpass common sense.
The entire industry became even crazier than before the 94 event. The closed exchanges all rebranded themselves, registered new companies overseas to reopen, and even became more extreme. The previous top three exchanges only traded Bitcoin, Litecoin, and Ethereum, but after 94, they all started mimicking the former Bite Era and the current Binance, turning into altcoin mishmash exchanges. They became even crazier in harvesting investors. During this process, I held onto BNB throughout the first half, taking it from 8 yuan to its peak without selling, only cashing out when it fell back to 90 yuan, successfully completing the first tenfold coin in the cryptocurrency space and seeing my wealth skyrocket. One morning, when BNB was at its peak, I woke up to find my account up over a million!
Thinking about how I had spent nearly a decade trying to earn my first million in business, and here I was, making over a million in one night. So exhilarating! 35,000 BNB were worth millions. Even without crashing the market, I could only sell over two days. This was the first time I realized that with such a large market cap, selling in the market wasn't that easy. The depth of BNB was already considered good, yet it was still challenging.
After BNB peaked and came down, the overall market had already shown signs of reversal. However, I still caught a few waves during the tail end of the market. GTC went up about threefold, BTM rose from 2 yuan to 6 yuan, EOS climbed from 30 yuan to 90 yuan, and Ripple surged from 2 yuan to over 20 yuan. Ultimately, my total assets were just shy of 10 million! How buoyant was I at that time? Well, I had already started looking at luxury apartments in Shanghai, haha!
Almost zeroing out 10 million While I was still immersed in the joy of crossing the ten million mark, the big market had quietly started to turn. A massive collapse was brewing. But at that time, I had completely lost my rationality; earning 10 million wasn't enough; I wanted to make 1 billion. I even began to fantasize about Bitcoin reaching 1 million and NEO hitting 5,000 yuan. My judgment of the market and my goals started to be based on my needs and desires rather than objective, rational analysis. Looking back calmly, this state was essentially no different from that of a gambler.
I'm sure those who haven't experienced this will find it hard to believe. Many would say, 'If I could make 10 million, I'd definitely cash out early.' However, the reality was that most people around me who made money, especially those of us who had just entered the industry, were in a similar state.
In the investment field, I have repeatedly verified a truth: when people are the most insane, it is usually when the crisis is greatest and when the most people are about to lose money. As the amount of money in my hands increased, I became increasingly reckless and blind, daring to invest in all sorts of ridiculous projects. In the end, I didn't even bother to read the white papers; I just looked at who was promoting them. At my peak, I invested in dozens of projects, with decent ones starting at several million.
At the tail end of the bull market, most people were as crazy as I was, rushing into a bunch of random projects. Even 'Space Chain' emerged, claiming to use satellites to build a blockchain network. Moreover, these projects required investment through intermediaries, which meant giving money to others while also needing their approval. Many of these intermediaries later ran away, which was very frustrating. Just as Bitcoin was about to break the 20,000 USD mark, the market suddenly plummeted. This was already a very dangerous signal, but the vast majority were still immersed in the madness of the raging bull market, thinking it was merely a correction.
Having never experienced the fear of being in a bear market, and feeling regretful about losing over 2 million overnight, but with a big pile of projects in hand, even if I wanted to flee, it was already too late. So like many newcomers, I chose to play dead, even justifying it by saying, 'Having experienced the storms, I view ups and downs with indifference. This minor correction means nothing.' I even mocked those old investors who fled in panic, resembling how the new retail investors during the last bull market mocked traditional ones.
The outcome of playing dead is predictable; when the cryptocurrency market rises, it exceeds imagination, and when it falls, it does so in the same way. After falling 50%, it could fall another 50%. Although there were rebounds in between, each time it failed to break the previous high, I hesitated to cash out, with a strong aversion to losses. Initially, I kept wanting to return to 10 million, but as profits retreated more, I thought it was getting close to the bottom and didn’t want to sell at a loss, ultimately getting deeper and deeper.
During the continued decline, the cryptocurrency market was a complete mess with various chains like real estate chain, voting chain, film chain... all sorts of public chains... and a bunch of BTC forks... Those once high-end projects that were praised to the heavens collapsed one after another. Some went to zero directly, while others dropped 90% and then another 90%. Some just ran away. This process naturally accompanied many bankruptcies and a slew of exposé articles and recordings, leaving investors stunned!
However, in the early stages of the bear market, there were still occasional good projects. I mainly grasped a metaverse project. Of course, back then, there was no concept of 'metaverse', it was called 'virtual world', similar to the foreign MANA, but domestically, this project could be played right away. I recognized the team's reliability and had a strong interest in the blockchain gaming track, so I focused on participating from the start. Initially, I only invested 200,000 yuan, but as the project gained popularity, I continuously increased my investment, eventually reaching around 2 million, with my paper profits peaking at about 5 million.
Why did I invest so much in this project?
1. I believed I understood the team and the gaming track, so I felt more secure and bold in my investment.
2. Because the overall market was already bearish at that time, I gradually sold off many unreliable projects and shifted my investment into this relatively certain project, especially since most of the other projects were losing money. This process lasted a year, and ultimately, I accumulated wealth over time.
3. This metaverse game was also very fun, and I got hooked unintentionally. At one point, in order to complete the industrial layout and maintain the guild's reputation, I directly invested over 300,000 yuan into a 'fight'. Investment turned into consumption, and losing money seemed almost inevitable.
4. In the later stages of the project, more than a year later, the coin price kept dropping. However, over the past year, I developed a lot of irrational feelings toward this project. I always hoped it wouldn't fail and could truly realize its grand design. Therefore, I invested a lot of time, energy, and even money to save it, eventually turning investment into 'entrepreneurship'. This mixed mindset of 'investment + entrepreneurship' was something I experienced for the first time, and I clearly couldn't escape this new pit.
During the continued decline in the coin price, I not only didn't sell a single coin but also continued to protect the market. After investing around 2 million yuan, my funds eventually ran out, and I could not recover.
At its lowest point, my 2 million principal was left with less than 200,000!
Oh, by the way, at the beginning of the article, I mentioned my first hundredfold coin NEO, which was bought in my wife's account. Her trading style is to hold onto coins.
NEO was bought at less than 8 yuan and she kept holding it. Even though it didn't sell when it reached over 1,000, it's still worth over 100 now, a tenfold return. However, because she participated in the metaverse project, where NEO could be used, it ended up getting wiped out, becoming her grievance, especially when NEO surged again during the last bull market.
This metaverse project dealt me a heavy blow during the bear market, and with other projects also continually shrinking, at the lowest point of the deep bear market, my paper funds plummeted from nearly 10 million to below 1 million. Moreover, due to the liquidity drying up in the bear market, it was challenging to cash out everything, and I could almost consider it zero. What's more absurd is that during this process, I didn't cash out a single cent! If it weren't for the ability to make money outside the market, I might have faced living difficulties!
From 250,000 to 5 million If the bull market in the cryptocurrency space was bustling and non-stop, the bear market was bone-chilling and utterly silent! Many once-star projects completely disappeared, and those that barely survived released intermittent operational reports to appease the masses. The industry influencers who were once surrounded by crowds also collectively disappeared, and the WeChat groups that used to be filled with news were now silent, even starting to post random ads. I heard that one of the previously hottest exchanges had only a few thousand active users daily. Many people temporarily left the industry, including myself. After the metaverse project failed, I spent some time in social e-commerce because, during the deep bear market, there were truly no money-making opportunities in the blockchain industry, whether in investment or work. This really opened my eyes as a new investor. I could never have imagined such a stark contrast between the bull and bear markets in the cryptocurrency space!
Time reached March 12, 2020. Due to the sudden outbreak of the COVID-19 pandemic, global capital markets crashed, and Bitcoin could not escape either, plummeting to historical lows of over 3,000 USD in a short time, causing countless people to go bankrupt. This event is known in the industry as the '312 tragedy'!
The pandemic caused many people to lose their jobs and stay at home. I took the opportunity to expand the scale of 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 cryptocurrency market, so I didn't make any moves. In fact, the 312 event was the best time to buy at the bottom. According to my operating style, I normally wouldn't miss such an epic opportunity, just like how I dared to put 1 million at the bottom during the closure of exchanges in 94.
Here, I've drawn a lesson: it’s not necessary to constantly spend too much time watching the market while investing. Important opportunities and operations are actually rare, but one cannot completely ignore them. If new opportunities arise, losing sensitivity to the market and industry could lead to missing out. After missing the bottom opportunity, I felt very regretful but didn't dare to chase highs easily; I just continued to keep an eye on the market.
From March to November, BTC steadily oscillated upward, rising from over 3,000 to nearly 13,000 USD at its historical high. People in the industry know that breaking through previous historical highs usually signals the start of a new bull market, which is the biggest sign of the return of the bull market. Later, with a surge of altcoins, old coins like Ripple and Litecoin also skyrocketed, and I couldn't sit still any longer, feeling that the new bull market had indeed begun!
However, due to family reasons, I had urgent cash needs and couldn't move my funds. Not wanting to miss the big market, I took out a 200,000 loan through Alipay and WeChat to buy 100,000 of ETH and 100,000 of BNB, with ETH priced at over 500 USD and BNB over 30 USD. Then I reviewed various exchange accounts, and some coins that had almost gone to zero before were now worth something again. I gathered another 50,000, which I directly used to open contracts, rolling over ETH, LTC, XLM, and ZEN with 2x leverage.
Rolling over means using profits to continue increasing positions, and with 2x leverage rolling over, it means maintaining a 2x leverage rate that would only face liquidation if it dropped 50%. This strategy is suitable for a bull market that is consistently rising. As long as there isn't a sudden 50% drop, I wouldn't face liquidation, maximizing returns. Fortunately, fortune favored me, and the new bull market indeed remained very stable, without significant corrections, unlike the last bull market that often experienced sharp corrections. Thus, I kept rolling, and my 50,000 turned into over 1 million. At its peak, BNB broke 600 USD, and ETH reached around 2,000 USD. Then, with a 100,000 principal and 10x leverage, I seized the gains from the meme coin FIL, directly pushing my total funds up to over 5 million!
500,000 was almost zero again Because I had already experienced a bear market, I understood that investment assets could not always rise and that being trapped in a bear market was terrifying. Therefore, I kept telling myself to be vigilant about 'taking profits.' When my total funds reached 1 million, I withdrew 300,000 to pay back the loan and treated myself to an extra 100,000 for a reward. Every day, aside from researching projects and the market, I thought about when I should withdraw. If I couldn't think clearly, I would withdraw in batches. Initially, I had a good plan: for every 100,000 increase in my account, I would exit a certain percentage. However, in practice, the account increased too quickly, giving me the illusion that if I just held on a bit longer, I could return to the 10 million peak!
Thus, the greed demon once again overwhelmed me, staging another unforgettable scene. Just before Coinbase's listing, I sensed this could be a turning point in the current bull market because this bull market was clearly driven by American capital, and Coinbase's listing was the biggest hype and the best exit opportunity for American capital. Moreover, the bull market had been going on for a long time; if a correction was needed, this was the best opportunity. So before Coinbase's listing, I closed all my leveraged positions and converted everything into BNB's spot market. Originally, this operation was a rational move, and Coinbase's listing indeed became the dividing line for this market. But the frustrating thing was that in the first two days after Coinbase listed, the market not only didn't decline as I expected but instead surged again. Influenced by the greed demon, I chose to gamble on one last rise, and because I sensed a potential drop soon, I set a stop-loss and increased the leverage to 10x. This way, if it just rose a little more, I could complete my goal and withdraw.
However, as expected, the market cut down on greedy investors like me. Just as I was about to escape, the 519 crash occurred, and the market suddenly plummeted. My 10x position was instantly stopped out, and my spot and contract accounts lost half their value. With only 2 million in BNB left, I thought about making up for the losses, so I opened a 1.5x position to catch the rebound, thinking that since it had already dropped about 30%, it couldn't possibly drop another 50%, right? But I underestimated the automated selling power caused by liquidations in DeFi. The market indeed dropped nearly 50% again, with BNB's price dropping by about 75% in just two days. At its lowest point, if it dropped another 10 USD, I would be liquidated and completely zero out.
Moreover, during this process, the exchange was completely frozen, and I couldn't operate anything! Even though I had prepared mentally for the possibility of going to zero from the first day of trading contracts, experiencing this scene still left me feeling on edge, with goosebumps! Fortunately, fortune smiled on me and didn't send me back to square one; the market rebounded slightly, bringing my account back to 500,000, and I gradually regained my rationality. At this point, I faced two choices:
1. Psychologically unable to accept a significant account drawdown and completely lying flat like in the previous bear market;
2. Timely withdrawal; even if 5 million turned into 500,000, as long as I still had the means to invest, I wouldn't fear running out of funds. After a bit of internal struggle, I chose the latter. I closed all my contract positions and converted everything into BNB's spot market. Although the subsequent market indeed rebounded again, if I hadn't closed my position, I could have quickly returned to several million. However, just before the big rebound officially started, there was indeed another significant drop, dipping below my liquidation point. At that moment, I was truly relieved and felt a great sense of accomplishment. This sense of overcoming greed was, for me personally, a much greater achievement than making millions!
The 500,000 I retained could be used to buy at the bottom during the bear market. Even if prices rose again, I could always re-enter. Being able to attack and retreat is the choice a mature investor should make. A mature choice may seem to lower my upper limit in the short term, but it can also elevate my lower limit, which is actually more crucial.
From 500,000 to 2 million The last bull market truly formed a double top structure. During the subsequent big rebound, I seized the opportunity to act again, and with several star projects like AXS, SAND, and WEMIX, I achieved around tenfold returns. Blockchain gaming and the metaverse are my areas of expertise and interest, and this market wave mainly concentrated in these two fields. It was truly a blessing from heaven, and my total account funds once again reached over 1 million!
After experiencing the punishment of greed twice, I no longer dared to be greedy. Firstly, in terms of investment, this time I wouldn't dare to go all-in on projects, no matter how promising they seemed.
Then, in terms of taking profits, when Bitcoin rebounded to 55,000 USD, I only kept one BTC in spot, cashing out all my other coins into USDT to lock in around 1.5 million. I didn't make any moves until BTC dropped to this bear market's low of 15,000. Throughout this process, I didn't take any further actions. However, during this period, I deeply engaged with the first blockchain game with a large number of real players and consumer support called 'Legend 4'. I initially wanted to see if there were any money-making opportunities, but as I played, I became hooked, leading the NASH guild to battle against South American players. In a moment of impulsiveness, I spent hundreds of thousands. Who says blockchain games don't have anyone spending money?
As a true gaming enthusiast, when encountering a good game, I find it impossible to resist the urge to spend money -_-!! This little operation brought my principal back to just over 1 million.
After 'Legend 4', I hadn't made much movement until later when Wemix switched from Klay to its own mainnet, triggering a token issuance storm that led to its delisting from South Korea's four major exchanges and OKEx. After carefully researching, I found no significant issues, so I started to buy gradually from 0.6 USD, all the way down to 0.15 USD (with a lowest spike to 0.12 USD).
It has now risen to 3-4 USD. However, I started selling gradually from 2 USD, clearing out around 4 USD, averaging over tenfold, but since my position was small, I didn't get rich. Later, when FTX collapsed and BTC dropped to over 15,000 USD, I felt the historical bottom might have arrived, so I decisively bought a third of my position in BTC, ETH, and BNB!
Additionally, I had also seen good returns from several small investments in chain games, ultimately bringing my funds to around 2 million! The dawn of the bull market was already lighting up the horizon. This was my third bull market experience. This time I started with 2 million in principal, a significant increase compared to the last bull market when BTC exceeded 20,000 USD with only 250,000 in principal. I felt much more at ease. In the last bull market, I invested 100,000 in ETH, 100,000 in BNB, and 50,000 in contracts.
Among those, 200,000 came from loans. At that time, I only hoped not to lose money; the second goal was to earn money. In the end, BNB yielded a twentyfold return, directly taking me up a notch. This aligns with what is often said in the investment field: 'Aim for the middle, and you will reach the top!' To be honest, I truly never expected BNB could rise from 30 USD to around 700 USD! So in this bull market, with ten times the principal, I planned to still adopt the strategy of the last bull market, later choosing a suitable position to put 80% of my capital into several mainstream coins and lie flat.
The remaining 20% of my capital will be invested in the blockchain games I am currently very optimistic about and skilled in! As for contracts, I won't be trading this time; the focus in this bull market is stability!
If I have any spare time and energy, I still plan to engage in the blockchain gaming sector because I believe the timing for blockchain games has truly come! It was too early before, as there weren't good games, and the next bull market might be too late, as many opportunities may have already been taken. This is just the right time to get involved in the upcoming bull market!
With the emergence of real players and consumers in blockchain games like 'Legend 4', 'MapleStory', and the blockchain version of 'Diablo', as well as the entry of leading game companies like Tencent, NetEase, Ubisoft, and Wemade from China, the quality of blockchain games has significantly improved compared to the last bull market, even reaching the standard of traditional games. As the vanguard of blockchain landing and application, this bull market will undoubtedly demonstrate the true charm of blockchain games, just like WEB2 did in the past! What exactly to do is still not completely figured out; I will likely still focus on building a community for blockchain games, gathering like-minded partners, connecting players, project parties, and VCs, and together achieving financial freedom!
Some of my investment reflections: Starting from 1 million → 10 million → 2 million → 5 million → nearly zero → starting from 250,000 → 5 million → nearly zero again → 2 million. In the six years since entering the industry, although I have not truly achieved financial freedom, I have experienced multiple ups and downs and have some reflections to share with everyone for reference.
1. Investment is a science Before entering the cryptocurrency space, I can say I had never participated in investment at all. Striking it rich suddenly due to good luck amidst insufficient personal capability is a very dangerous thing. I have repeatedly proven this truth through personal experience: the money earned by luck can be lost again by skill. In this process, I gradually realized that investment, like entrepreneurship, is a high-risk industry. It is a deep field of study only truly understood through practice. It took me a full 10 years from graduating college, full of passion and participating in entrepreneurship, to later experiencing continuous failures before finally earning my first bucket of gold. After jumping through various pits, I finally summarized a reliable entrepreneurial philosophy, leading me to make money without ever losing again.
Looking back now, investment is also a science with some basic principles that must be observed. Whenever I suffer significant losses, I definitely crossed certain red lines in the investment field. First, I jumped through all the major pits, then summarized my experiences, systematically learned the theories, and finally distilled them into my own system. I don't know if this approach is reliable or just a desperate lack of talent! Anyway, it seems that I've always followed this path from entrepreneurship to investment.
2. Investment is a high-risk operation Whether in entrepreneurship or investment, one must first realize that both are high-risk operations! Risks primarily arise from high uncertainty. These uncertainties stem either from cognitive blind spots, information barriers, or objective uncontrollable factors.
High uncertainty combined with high investment further elevates the risk level. For most people, the only effective way to control risks is to reduce investment.
Although knowledge payment and various self-media are popular now, seemingly making information sources and cognitive improvement readily available, in reality, there's not much useful content. Moreover, I have always believed that true understanding must come from practice; otherwise, it is easy to be 'all eyes but no hands.'
Therefore, I strongly recommend that ordinary people, especially those with average earning capacity outside the market, lower their investments. This is the most effective way to reduce investment risk. If one cannot control their investment, or even adds leverage, the consequences could be severe.
Leverage strongly disrupts one’s mentality, and combined with various pressures, it can lead to mental health issues. This is similar to entrepreneurship, but slightly less intense because the pressures of entrepreneurship come from very complex sources, while investment pressure is relatively singular.
In situations with leverage, if one ultimately fails, the consequences can be devastating. Many may take years to recover or may never bounce back! The impulse to use leverage in investment is much greater than in entrepreneurship, yet the barriers to entry for participation in investment are significantly lower than in entrepreneurship. Thus, ordinary people are more likely to fall into investment traps and get 'harvested'!
Here, I would like to cite an example that many Chinese have personally experienced but are not deeply aware of: 'In fact, taking out a loan to buy a house is the biggest leverage behavior!' But why did many people not realize the risks of leverage three years ago? Because for the past few decades, house prices have almost consistently risen. This is very similar to when I traded cryptocurrencies with 10x leverage; investing 10,000 is equivalent to investing 100,000. If it rises tenfold, I make a 100-fold profit, turning 10,000 into over a million. It feels amazing, and the previous real estate market was indeed quite delightful! When this period of rising prices continues long enough and enough participants join in, everyone becomes complacent and may even completely fail to recognize the risks of leverage.
Of course, some people may have a lucky mentality, thinking that the government will not let housing prices drop. Even if they do, the government will take the hit, or else they will fight for their rights, resembling people who attempt to fight for their rights when they lose money in cryptocurrency. From an investment perspective, trading houses and cryptocurrencies is fundamentally no different; the only difference is that most people feel they can understand real estate, thinking there’s a government safety net, while they don’t understand something like 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 cryptocurrencies. Once liquidation occurs, it’s game over, and one still has to repay the actual loan and interest. If one lacks repayment capacity, they might face a permanent downfall!
The mention of property here is intended to make more people deeply aware that investing and leveraging is a high-risk behavior. Any investment field, including real estate, if leverage is applied without full awareness, and if significant profits are made, it is likely just good luck. Just like when I first entered the cryptocurrency space and struck a lucky bull market. When faced with market fluctuations, one could feel lost, potentially losing both capital and interest.
3. How to avoid risk Only after fully recognizing risks and experiencing the negative consequences of risk can one truly value how to avoid them. My personal main experiences are as follows:
1. Don't go all-in Given the extremely high uncertainty and risks in investment, one should not go all-in! Every time you go all-in, there’s a chance it could all go to zero. I am my best example, as I went all-in on BTC and BNB shortly after entering the cryptocurrency space, quickly pushing my capital close to 10 million. However, later going all-in on metaverse projects and contracts nearly brought me to zero. The principle of not going all-in is actually basic common sense in the investment field. Many investment moguls and books will tell you this at the outset, but I indeed made this fundamental mistake.
Actually, new investors generally won’t start by going all-in. I initially only invested 100,000. The problem arises when small-scale investments yield rapid high returns; the greed demon unconsciously gets unleashed, ultimately overwhelming rationality and leading to all-in decisions. I am a typical example in this regard. Everyone should take me as a warning!
2. Be cautious with leverage Unlike going all-in, leveraging should still be used when necessary, especially in relatively certain opportunities like major bull runs. Decisively leveraging at such moments may help one reach several new levels. Those who started taking loans to invest in real estate twenty years ago fall into this category. However, leveraging is a high-risk operation within high-risk operations. More seriously, when many people begin leveraging in a particular investment field, it usually indicates that the field is experiencing long-term high growth. People observe those around them making profits or even becoming rich from leveraging, while those who do not leverage feel out of place.
In such scenarios, many blind followers emerge, lacking basic investment knowledge. When you try to explain the risks of leverage to them, they impatiently retort that housing prices definitely won't fall; if they do, the government will step in. Whether or not housing prices will fall is irrelevant; the point is their complete unawareness of the risks of leverage has already pushed them to the edge of a cliff. The timing and location of their downfall may just be a matter of time!
So, how to proceed cautiously with leverage?
1) Leverage in your most familiar field. First, familiarity leads to a better success rate. For most people, leveraging is a significant test of mentality. If one does not understand enough, it becomes challenging to stabilize one’s mindset, leading to irrational decisions that compound errors.
2) Before leveraging, always ask yourself repeatedly: if the worst-case scenario occurs, can you bear it? Only when the answer is a definite yes can you proceed with leveraging! Here, extreme rationality and conservativeness are crucial; never deceive yourself. Avoid blind following and do not harbor a gambling mentality! For most people, the prudent approach may be to leverage small positions, using little to gain big.
3) Once you sense the smell of risk, immediately reduce leverage or set stop-losses, even if it’s just a faint hint! Losing money while leveraged is far more stimulating than making money. I believe everyone who has experienced this knows it deeply! Lastly, I want to emphasize that I am not encouraging everyone to leverage; I am merely highlighting the risks associated with leveraging and the precautions needed when doing so. Whether to leverage ultimately depends on the individual. As I mentioned earlier, leveraging is a high-risk operation within high-risk operations, more suitable for aggressive individuals or those with strong risk tolerance. If you're not one of those individuals, I suggest you avoid it. Personally, I hardly leverage anymore! But if you meet the criteria, it’s best to leverage early. Just like with adventures, seize the youth; when it comes to losses, act early, because this endeavor severely tests human nature. Most people will likely have to suffer substantial losses before maturing. Human nature has remained largely unchanged over thousands of years; never be overly confident. There's a saying: 'Human nature cannot withstand testing!' And I am a living example. Before undergoing trials, I never thought I was that greedy.

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