Author: Route 2 FI.
Compiled by: Luffy, Foresight News.
In the ups and downs of the cryptocurrency market, how can individual investors avoid becoming 'market prey'? Crypto KOL Route 2 FI distills 18 practical lessons from personal experience, revealing the brutal nature and survival logic of the crypto market.
1. Don't think others will consider you.
Even if you feel like a part of a large community on Crypto Twitter, you are essentially fighting alone; this is a PvP game. In the market, everyone is self-interested.
2. The information asymmetry on Twitter is extremely high.
Understand the position of KOLs in the interest chain to make reasonable judgments about your investments. Follow the right people to gain valuable information (alpha); blindly following the wrong people may lead to losing everything.
3. Believe in yourself.
When the market is up, you ask others what they are buying, and the answer is: 'Idiot, don't buy when the market is rising.' When the market is down, you ask others what they are buying, and the answer is: 'It's all over; anyone buying now is a fool.'
4. Stay away from echo chamber effects.
Use Twitter to get feedback on your views, not to seek validation. For example, if you are considering buying HYPE, also look into the views of those who do not recommend it. Maybe you've overlooked something.
5. Argue less, research more.
Instead of arguing online with anonymous people, spend time reading white papers, experiencing on-chain applications, asking questions on Telegram/Discord, or recording your thoughts. Thinking on paper is most effective; write down your investment logic before buying.
6. Don't waver in your holding beliefs just because others are making money faster than you.
Your long-term holdings should be measured in years, not weeks or days. But if the investment logic changes, be brave enough to sell. Never 'stay loyal' to your position.
7. About trading.
If you feel exceptionally excited about a position, sell. If the price is rising parabolically, sell. Nothing will rise forever; to survive long-term, you must take profits.
8. If you can't explain the source of your DeFi platform's yield in two sentences, then you are the source of that yield.
9. In the crypto space, narrative is everything.
The stories we tell together have immense power. Dogecoin and SHIB once had a total market capitalization close to $100 billion. This reminds me of a saying: 'Do you want to make money, or do you want to prove you are right?'
10. Missed opportunities are not opportunities.
If you see a new crypto project and think, 'Wow, this idea is great,' but procrastinate for weeks before investing, then when its price suddenly skyrockets, don't follow the crowd and throw in money. Your investment opportunity was weeks ago; it's too late now, and you might buy at a local high.
11. Emotions are temporary.
When you start making money, you feel an extreme excitement, but the side effect is that you want to replicate that feeling over and over. Overtrading and frequently switching positions may just be to relive that euphoric emotion.
12. Every asset will have its highlights in a bull market.
I know you want to believe that all assets will rise together, but more often it's different sectors rotating in performance. Pay attention to emerging narratives and position yourself in advance.
13. Mistakes made in your 20s are better than those made in your 40s; a $1,000 mistake is better than a $100,000 mistake.
The first time I tried leveraged trading, I lost several thousand dollars within minutes. But I learned from it and moved on.
14. Why most people don't make money in the crypto market.
YouTubers / large crypto Twitter influencers start discussing a project / making videos (price rises).
The token enters the top 100 on Coingecko.
KOLs / VCs / early investors start selling during the rise.
After the token 'becomes famous,' ordinary retail investors want to buy in.
Retail buying = price goes up a little more.
KOLs / VCs / early investors clear out.
The token crashes (usually while you're sleeping, right?) — you cut losses.
15. Give yourself time.
We all want to get rich quickly, but steady progress wins the race. Remember, $81.5 billion of Warren Buffett's $84.5 billion net worth was earned after he turned 65.
16. What you want is not retirement, but freedom.
Retirement is like a beach vacation in the Caribbean; you get tired of it after a week. Freedom is waking up and doing what you want, creating with interesting people, and having plenty of time to spend with family and friends.
17. Don't easily go all in on the crypto industry.
If you really want to quit your stable 9-to-5 job and fully engage in the crypto industry, ask yourself whether you are willing to be online 10-16 hours a day, 7 days a week for several years in a row. Even then, success is not guaranteed.
18. When you finally succeed in the crypto market, you'll find it’s not what you originally wanted.
You have money, but you are still the same you. Ensure your life goals are not just about making money; otherwise, it's easy to fall into depression. But that's another story.