The cryptocurrency space is a place full of opportunities, with various ways to make money, such as low-risk arbitrage, participating in new coin offerings, trading, and dollar-cost averaging. Regardless of your qualifications, there is always a method that suits you. For an industry to grow, it must have a broad reach. Simply put, its thresholds must adapt to the capabilities of the majority, allowing diverse individuals to profit—that is the key to expanding the pie.
Some people say the cryptocurrency space is a scam and that it's impossible to make money. I believe there are only two possibilities for this situation: one is a rejection of the cryptocurrency space from within, and the other is laziness—nothing more. There is no third outcome. Why? Because they lack a macro understanding of the cryptocurrency space and still view it as a money-scam industry, thus choosing to refuse contact.
Making money is actually not difficult
For example, is dollar-cost averaging difficult? Not at all. For instance, when dollar-cost averaging into BTC, you only need to prepare the funds and continuously buy at set intervals. Once you make a profit of 50%, 100%, or even 200%, you can sell; the only variable is the duration. This method requires only a small amount of informational threshold, such as how to download software, how to buy USDT, and how to use a VPN; ordinary people can learn this with minimal effort. Additionally, activities like new coin offerings on exchanges, wallet point accumulation events, and airdrop activities are purely physical tasks that can be participated in with a little informational advantage. The threshold is low enough that almost anyone can give it a try.
The threshold for making money in the cryptocurrency space: technical and cognitive
In my view, the thresholds for making money in the cryptocurrency space can mainly be divided into two categories: technical thresholds and cognitive thresholds.
1. Technical threshold
The technical threshold refers to technical operations. For example, if you can program, you can participate in on-chain and exchange arbitrage like a scientist or perform cross-chain arbitrage, which requires a certain level of technical skill. Areas with high technical thresholds often require you to have a professional background or be willing to spend time researching.
2. Cognitive threshold
The cognitive threshold is the difference in understanding the essence of things. Trading profits come from cognitive differences; those with a high cognitive threshold can quickly identify mistakes in market pricing and seize opportunities to profit. A high cognitive threshold does not necessarily require technical knowledge but does require deep insight into the market.
Combination of high and low thresholds
Low cognition + high technology: For instance, arbitrage between contract spot prices on exchanges or between contracts. The principle is simple: the same item has different prices in different places, allowing you to buy low and sell high for profit. However, executing this requires technical support, such as writing scripts and running programs, making the technical threshold quite high.
Low technology + high cognition: For example, some VC-backed coins (coins supported by venture capital) can have a market cap of 500 million to 1 billion USD right after they are listed, often accompanied by continuously unlocking coins. In this case, you do not need to understand technology, but you must determine from a vast amount of market information whether its pricing is high or low, which requires extremely high cognitive ability.
If there is neither a technical threshold nor a cognitive threshold, and you simply buy a coin because someone said it was good, the probability of making money will be far lower than the probability of losing money. Think about it—if you have ever lost money in the cryptocurrency space, could it be because of this?
Why do I value cognitive thresholds more?
I personally tend to continuously improve my cognitive threshold. Although the technical threshold is useful, it has significant limitations and can be constrained by various conditions, such as equipment, environment, or technological updates. The cognitive threshold, on the other hand, is different; it is filled with limitless imagination and is vast without boundaries. To make more money in the cryptocurrency space, one must put in significant effort into improving the cognitive threshold.
Where does the cognitive threshold come from?
The cognitive threshold essentially stems from how we acquire and enhance our cognition. I have summarized two approaches: one is learning from real market data and trends, and the other is learning lessons from mistakes and failures. Below, I will break down these two methods.
Learn from real market data and trends
Some say that simply believing in others' recommendations to buy coins is likely to result in losses. This is true, but the key lies in who this 'other person' is. Money is the most genuine expression of intent because it carries the risk of real capital behind it. The value of market assets is determined through capital voting: small-cap projects are easily manipulated, but assets with a very high market cap are generally considered unmanipulated due to the high cost of long-term cheating. What we want to participate in is this 'unmanipulated' game to ensure fairness as much as possible.
Here, 'others' does not refer to a specific individual or small circle, but rather the entire market, assets recognized through capital voting on a global scale. In the cryptocurrency space, Bitcoin (BTC) and Ethereum (ETH) are clearly the market leaders. By allocating correctly, buying at the right time and with the right methods, and not relying on subjective emotions to time the market, you are likely to achieve good results.
For example, don't be fooled by the current modest increase in ETH, which is still questioned by many; once the bull market peaks, it may very well surpass BTC. The reason is simple: ETH is representative of blockchain applications, while the migration threshold for other technical forms or chains is too high. Once you hold this understanding, you can bottom out when ETH drops to 1300 USD and achieve a 100% return within a month. This method does not require you to have extensive additional knowledge; merely following the market's choices can lower the threshold and yield profits.
Learn lessons from mistakes and failures
I know many people like to play with meme coins or altcoins, hoping to make quick money. To profit from such strategies, one must learn from failures. It is estimated that 95% of those who play with altcoins lose money. For the same asset, some people earn while others lose; the difference lies in the level of cognition.
Those who try to profit by timing the market (precisely predicting buy and sell points) often attempt things they cannot do; whereas those who choose not to time the market and invest regularly know they cannot grasp the optimal price, so they simply give up on timing and earn profits through long-term holding. By observing others making money and themselves losing money, even average individuals can conclude: there must be a problem with my method. This process of reflection from mistakes can gradually enhance cognition and help them overcome thresholds.
The width and shallowness of the cognitive threshold
The cognitive threshold is wide and boundless, but not necessarily deep. Once you master it, you can summarize your own methodology and become invincible. However, there is a prerequisite for establishing a cognitive threshold: your 'blood pack' must be thick enough. In other words, during the process of borrowing superficial wisdom, you must withstand losses without being defeated, and ultimately be able to remain unattached.
Conclusion
In summary, the threshold for making money in the cryptocurrency world is the technical threshold and the cognitive threshold. The technical threshold relies on skills, while the cognitive threshold relies on insights. A combination of both can cover various ways of making money. If you lack both technical skills and cognitive understanding, and only blindly trust and buy, you are likely to lose money. However, as long as you are willing to learn and accumulate knowledge, whether through genuine or superficial practice, you can always find your own opportunities in the cryptocurrency space. If you persist, you will definitely be able to turn the tables and earn enough money for a lifetime.
