I once wrote hundreds of investment notes; if God decrees: 'All your notes will be burned and disappear after your death, people will no longer remember you'
What was once said, you can only leave one piece for future generations. Therefore, I would unhesitatingly choose to leave this article behind.
I can't claim to be a top expert; I can only say that I've survived in this market for seventeen years, barely maintaining a basic state of profitability.
The market has seen many experts rise and fall over the years; there are no secrets in this market, nor any so-called trading secrets.
And tricks, it seems like many traders are pursuing the so-called holy grail, but unfortunately, this market does not have a holy grail, just like physics.
The principle is the same as there being no perpetual motion machine. What exists is only years of experience, correct cognition, and consistent execution.
Here is a screenshot of one of my accounts, not to boast but to let you know that investment trading is actually very simple.
I have been in the crypto circle for 17 years, having encountered at least 1000 investors, but those who successfully achieved financial freedom are less than 10, with a success rate of less than 1%.
Part One: Why is it harder to make money in the crypto circle than to climb to the sky?
We might as well adopt divergent thinking to explore the answer to this question: Why was Vitalik able to create the Ethereum empire solely based on a white paper, while countless blockchain entrepreneurs exhausted their life savings with nothing to show for it? Why did the DeFi wave in three years create 60 billionaires, while traditional mining struggled to produce a centibillionaire in ten years? Is it because those playing DeFi are geniuses, while those running mining operations are fools? The answer is clearly no: because blockchain is an exponentially evolving industry, while mining has long entered a saturated red ocean.
In a field where the speed of technological iteration exceeds Moore's Law, yesterday's truth may be today's fallacy. Players who became wealthy through ICOs in 2017 mostly died in the impermanent losses of DeFi mining in 2020; NFT traders from 2021 are now struggling with on-chain junk assets. This leads to the first law of survival in the crypto circle:
In an industry where the daily active code update volume exceeds 100,000 lines, the depreciation speed of experience is faster than the profit speed.
The density of technological revolution in the crypto circle far exceeds that of traditional finance: 2009 saw the birth of PoW, 2014 saw the emergence of smart contracts, 2020 witnessed the explosion of DeFi, 2022 marked the breakthrough of ZK technology, and 2024 may see the fusion of AI + blockchain... Disruptive innovations appear every 18 months. The first batch of people who made money from Bitcoin mining couldn't understand the value of NFTs; the young people who understood NFTs couldn't grasp the scaling logic of Layer 2. This generational cognitive gap is a hundred times harsher than the debate over technical analysis and value investment in the stock market.
Looking at the industry threshold: opening an exchange requires a license, but buying coins only requires a phone number. In 2024, the global cryptocurrency user base will exceed 500 million, with Binance alone having 8 million daily active users. This means that when you are opening long positions on ETH at OKX, your opponents could be Silicon Valley programmers, Nigerian miners, Wall Street quantitative funds, or even AI trading robots. In the stock market, with 30 million investors fighting fiercely, how many people need to be eliminated in the crypto circle where 500 million are battling to become the top 1%? The answer is 49.5 million.
This brings us to the second survival law of the crypto circle: zero barriers mean zero protections. When market vendors start discussing FIL staking, the scythe is already sharpened.
The most fatal aspect is that the crypto circle is an even more extreme zero-sum game than the stock market. Behind stocks, there are real companies creating value, while the rise and fall of cryptocurrencies are essentially a transfer of capital consensus. The 100U you earn in the contract market must come from another liquidated person's margin; the NFT you bought at a high price will eventually trap the next believer. In this pure capital game, opponents are not only evolving but can also use tools like leverage, quantification, and cross-chain arbitrage for 'dimensionality reduction strikes'. While you are still looking at K-line charts, Wall Street funds have already used AI to analyze on-chain capital flows over 24 hours.
The cruelty of the crypto circle lies in its amplification of the destructive power of three major laws: the speed of technological iteration renders experience ineffective, a low barrier leads to a flood of opponents, and the zero-sum game nature determines that someone must be eliminated. This is why even if you are exceptionally intelligent and watch the market day and night, you can still go to zero in a black swan event—just like during the LUNA collapse in 2022, those institutional investors who were liquidated at three in the morning had K-line charts that were more sophisticated than yours or mine.
Having said so much, I actually hope to dissuade 70% of investors. The crypto circle is not a casino, but a meat grinder; at least the casino has clear rules, while here even the dealer can be kidnapped by hackers. But in the end, I estimate that even less than 1% can be dissuaded. People always have a kind of inexplicable confidence, especially those who are doing well in other industries, thinking they can see through the essence of blockchain, only to come in and find out they don’t even understand the difference between private keys and mnemonic phrases.
The remaining 30% are either practitioners who make a living in the crypto circle or idealists who have faith in blockchain technology. Since you choose to stay and fight, you must first know yourself and your enemy. Next, I will expose the fatal mistakes that 90% of crypto investors will make.
Part Two: The Ten Deadly Traps for Crypto Investors
1. Spend more time studying toilet paper than researching projects
I know a boss from a traditional industry who entered the market in 2021 with 5 million. Before buying coins, he didn’t even bother to read the white papers, reasoning that 'aren't blockchain projects all the same?' He bought a certain public chain token based on a friend's recommendation and only realized that the so-called 'world-leading technology' was actually copied Ethereum code when the project team ran away.
70% of people in the crypto circle: compare three convenience stores to buy a pack of cigarettes, but only look at community popularity when buying cryptocurrencies worth hundreds of thousands. They know that Bitcoin's total is 21 million but do not understand the halving cycle's impact on mining difficulty; they have heard of DeFi liquidity mining but cannot calculate the impermanent loss formula. When you ask him why he bought SOL, he will say 'Musk recommended it', but he doesn't know what hidden dangers SOL's consensus mechanism has.
2. Treat contracts like a casino, yet expect to get rich by luck
'Have you ever played baccarat in Macau?'
'Yes!'
'Do you envy casino owners who win without losing? Why can they make money running casinos while you lose betting?'
'Because he is the dealer, and I am the gambler.'
Similarly, why do exchanges earn hundreds of millions annually from contract fees while you repeatedly face liquidation in the contract market? Because you treat contracts as gambling tools, while exchanges see them as cash machines.
30% of cryptocurrency investors treat contract leverage as a 'quick wealth route'. Their reason for going all-in with 100x leverage is surprisingly 'the K-line looks like it's going to rise tonight'. They don't realize that 100x leverage means a 1% price fluctuation will trigger liquidation—while Bitcoin's daily volatility exceeds 3%. Such people are like smoking at a gas station with a lighter; liquidation is just a matter of time.
3. Trading cryptocurrencies based on metaphysics, mistaking luck for skill.
Many people's basis for buying and selling cryptocurrencies is more absurd than astrological predictions:
'Today is Bitcoin's birthday; it will definitely rise.'
'The last two digits of this token's code are 88, good luck and great fortune'
'Musk tweeted about a dog; DOGE is going to pump.'
Even more ridiculous are those 'main force believers': 'This coin's main force has finished accumulating, and will soon skyrocket by 10 times.' 'The dealer is washing the盘; I want to add to my position.' Brother, in a decentralized exchange, not even the project party knows the chip distribution, and you can actually see the 'main force's moves'? Such people should open their third eye, not trade.
In 2023, a certain MEME coin skyrocketed 50 times and then returned to zero. I asked the retail investor who bought in why he did so, and he said, 'I felt the community was very active.' This type of investment decision based on wishful thinking is no different from crossing the street with your eyes closed.
4. Pretending to be diligent, numbing oneself with fragmented information
50% of crypto investors share a common trait: they have 10 market apps on their phones, follow 200 crypto KOLs, and spend 8 hours a day scrolling through communities looking for analysis. Yet their profit curves are more dismal than an ECG.
These people have collected 100 'cryptocurrency wealth secrets' but have never fully read a single white paper; they can recite every Bitcoin halving date but can't calculate the annualized return of dollar-cost averaging; they know Vitalik's birthday but don’t understand Ethereum's Gas fee mechanism. This fragmented learning is like trying to piece together a complete mirror with fragments, ultimately only reflecting distorted cognition.
Even scarier is that many so-called 'crypto mentors' themselves don’t understand blockchain and rely on plagiarizing Medium articles to make a living. Learning to trade crypto from such people is like learning archery from a blind person.
5. Only buying coins they do not understand.
70% of programmers trade cryptocurrencies but never buy the tokens their companies develop, instead opting to buy NFT related to agriculture; mining bosses would rather trade DeFi tokens than touch stocks related to mining machines.
Because I understand, I question; because it is unfamiliar, I am superstitious. This is the 'ambiguous beauty' trap of the crypto circle. Those involved in Layer 2 know the technical flaws of Optimism, so they don't buy OP; but they feel that Solana will soon rise, heavily investing in SOL, yet are unaware of the serious network congestion issues SOL faces.
Having studied a quality project for half a year in my watchlist, I was suddenly attracted by a new coin that emerged in the community. This 'novelty-seeking' mentality causes 90% of people to always chase highs and sell lows.
6. Technical stop-loss turns into 'frequent losses'
This is the most controversial point. Almost all crypto tutorials say 'always take stop-losses', but I've seen too many people mechanically stop-loss and reduce their 100,000 capital to only 10,000.
The essence of technical stop-loss is 'using rules to cover laziness': you are too lazy to research project value, so you use the breach of the 20-day moving average as a sell signal; you are too lazy to analyze market sentiment, so you use a 10% drawdown as a stop-loss point. The result is that the normal pullback of quality projects is mistaken for a 'breakdown', while the decline of garbage coins is treated as 'washing the盘'.
I never execute technical stop-losses, only logical stop-losses. If my reason for buying ETH is 'deflation after the merge', then as long as that logic remains unchanged, I won't sell even if it drops 50%; but if I find a flaw in the staking unlocking mechanism after the merge, even if I am in profit, I will immediately liquidate.
7. Pursuing precise bottom-fishing, yet liquidating before dawn
This is a common mistake among experts. When Bitcoin fell to $16,000 in 2022, many thought it would fall further and waited to bottom-fish at $12,000, resulting in missing the rebound to $30,000.
There is no 'precise bottom' in the crypto circle, only a 'value range'. Those who try to buy at the lowest point often face liquidation due to entering too early with leverage. Just like in May 2021, someone went long on Bitcoin at $40,000 with leverage, only to be liquidated when it fell to $30,000, missing the later high of $69,000.
Vague correctness far outweighs precise errors. Gradually buying Bitcoin between $16,000 and $20,000 is much more reliable than betting on a $12,000 bottom.
8. Being overly confident when buying, and overly panicked when falling
During the AI token frenzy in 2023, a friend bought into a certain AI concept coin with all his funds after hearing my analysis, reasoning that 'this will definitely double'. The result was a 20% drop after buying, and he started searching for 'good news' in the community every day, losing sleep when he saw someone bearish, ultimately liquidating at the bottom.
This 'from conviction to doubt to denial' three-part saga of liquidation plays out every day in the crypto circle. Before buying, one feels like Buffett; after a drop, one feels like a fool. Essentially, it is a lack of confidence in one's own understanding—you don’t believe in the project's value; you believe in 'yourself being right'.
9. Having the ambition to earn 100 million, yet lacking the patience to endure three months.
The crypto circle has a '333 Law': ordinary investors can tolerate three consecutive contract liquidations, being stuck in positions for three months, and suffering a 30% floating loss. Exceeding this threshold will result in complete collapse.
I designed a quantitative strategy that backtested an annualized return of 150%, but required enduring five consecutive losses. During the testing period, 80% of the testers gave up after the third loss, preferring to chase those so-called '90% win rate' garbage strategies.
In 2024, ARB fell from $1.2 to $0.8, and many people sold at a loss without waiting for the subsequent rise to $4. They did not fail to understand Layer 2's value but could not endure the three months of turbulence.
10. Treating leverage as a weapon, yet it becomes a tool for self-destruction.
10x leverage can amplify profits as well as fears. During the FTX crash in 2023, many people bottom-fished SOL with 5x leverage, only to see the price drop from $20 to $10, realizing after liquidation that they actually believed in SOL's long-term value.
Leverage is like nuclear weapons; ordinary people will only destroy themselves with it. The premise for professional players using leverage is: position not exceeding 5% of capital and having hedging tools. Yet 90% of people use leverage because 'they want to earn enough money to buy a house quickly.'
Part Three: Five Common Traits of Crypto Survivors
I have worked with four big shots who turned tens of thousands into hundreds of millions in the crypto circle. They have very different styles: one focuses on the primary market incubation, one is skilled in contract arbitrage, one deeply engages in Bitcoin dollar-cost averaging, and one only plays blue-chip NFTs. But through observing their trajectories over 17 years, I have found a commonality of success.
Fate: Hitting the era's dividend.
These four big shots, two made their fortunes during the 2013 bitcoin bull market, one seized the 2017 ICO wave, and the last one profited from DeFi mining in 2020. Their commonality is that they had already deeply cultivated a specific field for 2-3 years before the explosion.
The 'fate' of the crypto circle is hitting the cycle: 2011-2013 was the mining dividend period, 2014-2017 was the public chain dividend period, 2018-2021 was the DeFi dividend period, and 2022-2025 may be the AI + blockchain dividend period. Those who miss the cycle will earn only small amounts no matter how hard they try.
As Buffett said: 'Life is like a snowball; the important thing is finding wet snow and a long hill.' The wet snow in the crypto circle is the technological revolution, and the long hill is the bull market cycle.
Luck: The truth of survivor bias.
Many think that big shots rely on precise judgments, but in fact, they are just 'survivor gamblers'. During the 2017 ICO boom, that big shot invested in 10 projects, 9 of which went to zero, but 1 rose 1000 times, resulting in an overall profit of 100 times.
Success in the crypto circle requires luck, but luck favors the prepared. If you invest in 100 projects relying on luck, and invest in 10 projects each researched for 3 months, it's based on luck + cognition. Those who chase hot trends all day are like throwing darts with their eyes closed; even if they hit the target occasionally, they can still be wiped out by the next market wave.
Focus: Sharpen a knife over ten years
All four big shots have a common trait: they only operate in fields they are good at. Those in the primary market never touch contracts, while those playing NFTs may not understand mining but excel in their own domain.
That bitcoin dollar-cost averaging big shot, who started investing 1000 yuan every week since 2013, never stopped regardless of bull or bear markets. He experienced three crashes of 80%, but his investment plan never changed. By the time of the bull market in 2021, this money multiplied by 120 times.
The biggest taboo in the crypto circle is 'knowing everything but mastering nothing': trading contracts today, mining tomorrow, and playing NFTs the day after. Ultimately, they only skim the surface in every area and miss out on genuine opportunities.
Diligence: Turning 24 hours into 48 hours
Their lives are simple to the point of being dull: spending 12 hours a day researching projects, reading white papers, analyzing on-chain data, and tracking community dynamics. That NFT big shot can remember the floor price changes and the stories behind 500 blue-chip projects.
Diligence in the crypto circle is not about staying up late watching the market, but about deep thinking. Can you understand Ethereum's yellow paper? Can you calculate Uniswap's slippage formula? Can you analyze a certain token's inflation model? These are the keys to closing the gap.
Abandon: The wisdom of knowing when to give up
This is the most counter-intuitive point. That contract big shot only made 20 trades in a year, missing 99% of the market movements. But his win rate was as high as 80%, with each profit being at least 3 times the losses.
Ordinary investors always want to seize every opportunity: seeing MEME coins rise and chasing them, hearing about new public chains and trying to invest, resulting in scattered energy and diluted capital. But the big shots know how to give up: they don’t invest in things beyond their understanding, don’t invest when the risk-reward ratio is less than 3:1, and don’t invest in incomprehensible models.
As that NFT big shot said: 'I only buy stories I can understand; even if I miss 100 opportunities to get rich, I can't step into 1 trap that leads to zero.'
Conclusion: The essence of the crypto circle is a survivor's game.
17 years of experience tells me, the core of making money in the crypto circle is not technical analysis, not value investment, but 'survival'. Surviving the bear market, surviving black swans, surviving your own stupidity and greed.
Those successful 1% are not 100 times smarter than you, but have made 99% fewer mistakes. They know to reduce positions in bull markets and lay out in bear markets; they understand to use small positions for trial and error and large positions for certain profits; they recognize their ignorance and only earn within their cognitive range.
If you must stay in the crypto circle, remember this:
When the market comes, anyone can make money; when the market leaves, only those who have money left are the winners.
For 17 years, I have seen too many myths of overnight wealth and even more tragedies of overnight zero. The crypto circle never lacks opportunities; what it lacks is the patience and discipline to survive until the opportunity arises.
If you are also a technology enthusiast feeling helpless and confused in trading, wanting to learn more about the crypto world and cutting-edge information, click on my profile and follow me, so you won't be lost anymore! Clear market understanding gives you confidence in execution. Steady profits are much more practical than fantasizing about getting rich.
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