The cryptocurrency world is like a jungle hiding gold mines; some accumulate slowly through stable mining, some quickly reap profits by descending from high altitudes, while others fall into traps and lose everything. In my 10-year cryptocurrency career, I’ve tried holding spot coins, leveraging contracts, and speculating on NFTs, starting from 30,000 to now over 10 million; I've encountered more pitfalls than profits. Today, I will break down these practical experiences to tell you the different paths to making money and the life-saving rules.
1. Spot investment: A 'safe gold mine' for ordinary people, making slow money through trends.
'Spot trading is the foundation, contracts are the building'— this is what I understood only after being liquidated 3 times. For ordinary people, spot trading is not the slowest way to earn, but the only way to survive through 3 bull and bear cycles.
1. Why is spot trading the safest?
Low risk ≠ no risk: A 50% drop in mainstream coins is common, but a 90% drop is rare (except for black swan events), while altcoins going to zero is the norm. In the bear market of 2022, my BTC dropped 70%, but it rebounded to a new high in 2024, while only 2 out of 10 altcoins bought at the same time remained traded.
Peace of mind = saving money: No need to monitor the market; busy workers can invest for 1 hour a month. I've seen too many people abandon cryptocurrency because 'they don't have time to watch the market', yet they don't realize the core of making money in spot trading is 'enduring time'.
The compounding effect crushes short-term trading: ETH rose from $100 in 2017 to $4,800 in 2021, a 48-fold increase over 7 years; even if I missed the peak, holding for 3 years still yields a 10x profit, more reliable than daily short-term trading.
2. My spot trading practical strategy.
(1) Choosing coins: Only invest in 'hard currency that withstands bull and bear markets'.
Core position (70%): BTC, ETH. The reason is simple— they are the 'dollar and gold' of the cryptocurrency world, the first choice for institutions entering the market; no matter how strict regulations are, they won't disappear.
Satellite position (20%): Leading public chains (SOL, AVAX), leading tracks (RNDR-AI, MKR-DeFi). These coins have larger fluctuations than BTC; in a bull market, they can magnify profits, but choose those 'with practical applications' and stay away from purely conceptual coins.
Observe positions (10%): New track potential coins (such as RWA concept coins in 2024), use small funds for trial and error, increase position when it rises, and feel no pain when it falls.
(2) Operations: Dollar-cost averaging + phases, both resistant to downturns and able to capture main upward trends.
Bear market dollar-cost averaging: When Bitcoin is below the previous high by 50% (like dropping to $16,000 in 2022, previous high $69,000), allocate 10% of your monthly salary to buy, not looking at prices, but at 'undervalued zones'.
Bull market phases: After breaking historical highs, sell 10% for every 20% rise. For example, if ETH rises from $4,000 to $4,800 (20%), sell 10%; if it rises to $5,760 (another 20%), sell another 10%. This locks in profits without missing out on further gains.
Wealth management: Store long-term idle coins in exchanges for wealth management (Binance offers 3%-5% annual interest), ETH staking offers 4%-6% annual returns, equivalent to 'adding interest' to assets, allowing for some pocket money even in bear markets.
(3) Profit case: The certainty of exchanging time for space.
Bought ETH in 2020 ($400), sold half in 2021 for $4,000, earning 9 times; sold the remaining half for $3,000 in 2024, total profit 10 times. I went through a valley in 2022 when it dropped to $880, but because it was spare money, I held on.
Bought SOL in 2023 (at $20), sold two-thirds in 2024 for $200, earning 9 times; set a moving stop-loss for the remaining, even if it drops back to $100, I can still secure an 8 times profit.
2. Contract trading: A high-yield 'double-edged sword'; I earned 80% with 5 times leverage, but also faced liquidation with 100 times leverage.
'Can contracts be traded?' My answer is: Yes, but 90% of people are not suitable. It’s like a sharp knife; when used correctly, it can quickly slice through meat, but if used incorrectly, it can chop off your own hand.
1. Only touch contracts in two market conditions.
Increase positions when trends are clear: When Bitcoin breaks key resistance levels (like breaking $30,000 in 2023), open long positions with 3-5 times leverage, following the trend and not trying to pick a top.
Operate in reverse during extreme emotions: After market FUD (panic) causes a sharp drop (like when Silicon Valley Bank collapsed in March 2023 and BTC fell below $20,000), use small positions to bottom-fish; when the greed index exceeds 90 (like at the peak of the 2021 bull market), short with light positions.
2. Risk management rules that must be ingrained.
Leverage ≤ 5 times: More than 10 times leverage is gambling with your life. With 5 times leverage, a 20% market reversal will trigger liquidation, giving enough time to cut losses; with 100 times leverage, a 1% reversal will trigger liquidation, and not even a deity can save you.
Stop-loss = Lifeline: Single trade losses must not exceed 5% of the principal. For example, with a $100,000 principal, the maximum loss per trade is $5,000; cut immediately at the point, regardless of 'whether it will rebound'.
A maximum of 2 trades per day: Frequent trading must result in losses. I tried making 5 trades in one day, winning 3 and losing 2, but ended up losing on fees, and my emotions were shattered.
3. Lessons from liquidation are more valuable than profit cases.
The 2022 LUNA crash: After seeing a 90% drop, I impulsively used 100 times leverage to bottom fish, resulting in it going to zero within half an hour, losing $300,000, equivalent to two years' salary.
Overtrading in 2023: After three consecutive stop-loss trades, I wanted to 'win it all back' and leveraged against the trend, resulting in a 30% drawdown of my principal, taking 3 months to recover.
Conclusion: Contracts are 'amplifiers' that can amplify profits, but they can also amplify greed and fear. Ordinary people should avoid them; if you really want to trade, practice with a demo account for six months, and only use real funds when you can stabilize profits, and invest no more than 10% of your principal.
3. NFT and Meme Coins: High risk, high reward 'speculation game'; quick in and out is the way.
If spot trading is deposits, contracts are stocks, then NFTs and meme coins are 'lotteries'— winning can make you rich, but losing means going to zero. This part I only dare to play with 'spending money', and promptly convert any profits into mainstream coins.
1. NFT Investment: Focus on 'blue chips' and 'new concepts'.
Only deal with blue-chip NFTs: BAYC, Pudgy Penguins, these have been tested through bull and bear markets, have good liquidity, and there are buyers even when they drop. The BAYC bought in 2021 fell 60% during the 2022 bear market but returned to a high in 2024 due to 'consensus'.
Free Mint ambush: Before new projects go live, pay attention to Discord communities and participate in early activities to mint NFTs for free. A small image I minted for free in 2021 later rose to 2 ETH (about $8,000 at the time); this kind of 'zero-cost opportunity' is worth waiting for.
Focus on new conceptual tracks: In 2024, when the ERC404 concept became hot, buying Pandora resulted in a 10x rise, but take profits promptly; once the hype passes, these conceptual coins drop quickly.
2. Meme coins: Earn from 'emotional differences', don't believe in 'value'.
Only play in the early stages: Before launching on Uniswap, ambush through communities (like PEPE, WIF before launch), and run after multiplying a few times at launch; never fantasize about '100x coins'.
Strictly set stop-losses: Always set stop-losses when buying meme coins; cut at a 20% drop, regardless of 'whether it will rebound'. I bought 5 meme coins; 3 went to zero, and 2 earned 5-8 times, and by using stop-losses, I managed to keep overall profits positive.
Case study: Bought PEPE in 2023, invested $5,000, sold after it rose 5 times, turning $25,000 into ETH; bought WIF in 2024, invested $10,000, exited after 8 times; the profits from these two trades are enough for a year's family vacation, but the invested principal was actually quite small. 4. The underlying logic of continuous profit in the cryptocurrency world: Protect the principal and earn money within your understanding.
After 10 years of trial and error, I've summarized 5 'survival rules' suitable for anyone looking to make money in the cryptocurrency world long-term:
Focus on spot trading, with others as a supplement: Place 80% of your funds in mainstream coins like BTC and ETH, and 20% in contracts, NFTs, and other risky assets. Even if the latter loses everything, it won't affect the overall situation.
Invest spare money, avoid leverage: Trade with money you won't need for 3-5 years; losses won't affect your life, allowing for a stable mindset to hold through bull and bear markets.
Airdrop arbitrage, zero-cost accumulation: Pay more attention to airdrop activities of new projects (like early participation in Layer2 project interactions), zero-cost harvesting, accumulating little by little; in 2023, I earned $50,000 from airdrops, equivalent to 'finding free money'.
Stay away from 'junk coins': 90% of altcoins are tools for teams to raise funds; remember 'those that rise quickly are not necessarily good, those that fall slowly are more reliable.'
Continuously learn about new tracks: The cryptocurrency world changes too quickly; DeFi in 2021, AI in 2023, and RWA in 2024, every new track has opportunities; those who don't learn will be eliminated.
Finally, I want to say: There are many ways to make money in the cryptocurrency world, but what keeps you in this market long-term is not a single windfall, but the ability to 'not lose big money'. Spot trading earns money through time, contracts earn money through discipline, and NFTs and meme coins earn money through luck—find what suits you, maintain your bottom line, and you can survive and earn your share in this jungle.
Important Reminder (personal sharing, definitely not advice):
My personal experiences and practices are purely for sharing; they absolutely do not constitute any investment advice! Cryptocurrency is extremely high-risk, with volatile prices; losing everything can happen in an instant. Please remember:
* Never use borrowed money or living expenses to trade cryptocurrencies!
* If you hear terms like 'guaranteed profit' or 'sure win', block them immediately; 99.99% are traps.
* Before making any investment decisions, do your homework and carefully consider whether you can withstand the worst outcome.
In the cryptocurrency world, those who survive are the winners. Let's encourage each other and hope we can all find our way in this jungle.
