The fluctuations in the cryptocurrency market are truly more thrilling than a roller coaster ride. One moment it seems wealth freedom is within reach, and the next it feels like the end of the world is upon us. Take Bitcoin, for example; its price trend can be described as a 'crazy roller coaster'. In past periods, Bitcoin's price could surge significantly in a short time, attracting countless people to rush in. But immediately after, there could be a sudden crash, causing many investors to fall from heaven to hell in an instant.
Such volatile markets bring extremely high risks. Many investors are ruthlessly swallowed in the waves of the cryptocurrency market. Some, unable to resist temptation towards the end of the bull market, invested everything, only to be stuck at high positions, leading to significant asset shrinkage; others blindly tried to buy the dip in the bear market, thinking they had found a bargain, only to realize they bought in the middle of a decline, ultimately losing everything. According to relevant statistics, in the cryptocurrency market, those who can truly survive long-term and achieve profitability are few and far between. This highlights how difficult yet crucial it is to survive in the cryptocurrency market. Only those who can withstand the storms and remain standing have the right to seize opportunities and achieve profitability in future markets.
Key strategies for survival
Reasonable capital management: Don't put all your eggs in one basket
In cryptocurrency investment, capital management is absolutely crucial. First, never use your 'life-saving money' for investment. You must ensure that the funds you invest in the cryptocurrency market, even if completely lost, will not affect the basic living of yourself and your family, such as food, housing, and medical care. Otherwise, once the market situation deteriorates, it is easy for your mindset to collapse, and your operations will become distorted.
Secondly, capital must be reasonably diversified. Do not put all your money into one cryptocurrency. The cryptocurrency market features a wide variety of projects, ranging from established mainstream coins like Bitcoin and Ethereum to various emerging altcoins and scam coins. Different cryptocurrencies come with different risks and potentials. By diversifying funds across multiple types and tracks, you essentially add multiple layers of insurance to your investments. This way, even if one cryptocurrency faces issues, others may still compensate for the losses. For instance, in addition to allocating a portion to Bitcoin and Ethereum, you can also pay attention to some promising emerging public chain projects and cryptocurrencies with application prospects in specific fields.
Strictly adhere to stop-loss and take-profit: Take action when necessary
Stop-loss and take-profit, these two operations in cryptocurrency investment are like the investor's 'umbrella' and 'ATM'. Before buying any cryptocurrency, you must have a bottom line in your mind regarding how much loss you can tolerate at most. For example, you can set a stop-loss ratio, and once the price of the cryptocurrency drops to this ratio, no matter how reluctant you are, you must decisively cut your losses and exit. Don't hold onto the hope that it will rise back. Often, this kind of luck-based thinking can turn small losses into large ones, and eventually lead to complete loss.
Take-profit is equally important. When the cryptocurrency you hold reaches your expected profit target, such as a 50% or 100% increase, you should consider selling in batches to lock in profits. During the frenzy of a bull market, greed often takes over, leading you to think just a little more increase is possible, but in the end, you might give back all the profits. Therefore, it is essential to overcome greed and execute according to your pre-set take-profit plan.
Stay away from leverage contracts: Don't let desire consume reason
Leverage contracts are indeed a 'high-risk game' in the cryptocurrency market, and for beginners and most ordinary investors, it is best to stay away. Under the influence of leverage, even small fluctuations in cryptocurrency prices can be magnified into huge gains or losses. For example, if you use 10x leverage, a mere 10% reverse fluctuation in price could wipe out your entire principal, leading to liquidation. Moreover, contract trading is essentially a zero-sum or even negative-sum game; in this game, only a few skilled traders and exchanges make money, while the vast majority of retail investors are just 'sheep donating money'. Many people fall into the trap of leverage contracts due to the allure of seemingly high returns, ultimately getting trapped in an inescapable abyss. Therefore, if you want to survive in the cryptocurrency market, do not easily touch leverage contracts.
Continuous learning and research: Be a prepared investor
The cryptocurrency market is a field full of innovation and change, with new technologies, concepts, and projects emerging endlessly. From the earliest Bitcoin to later Ethereum smart contracts, and now various emerging concepts like DeFi, NFT, and GameFi, each technological innovation and conceptual rise brings new investment opportunities and risks. As an investor, if you don't continuously learn and understand these new things, you can easily miss opportunities or fall victim to scams masquerading under new concepts.
For example, when the DeFi concept first emerged, many people did not understand it and missed the early participation opportunities, while those who learned and researched in advance gained substantial returns in this field. Therefore, to survive and profit long-term in the cryptocurrency market, one must maintain a passion for learning and curiosity, continuously update their knowledge base, and deeply research various projects' technical backgrounds, team strengths, application scenarios, market demands, and more. Only in this way can one filter out truly promising investment targets among numerous projects and improve their survival chances in the cryptocurrency market.
Analysis of Successful Survival Cases
Case 1: The Victory of Long-termism
There is an investor we can call Old Zhang. Old Zhang started to get involved with Bitcoin in 2013, when Bitcoin was far from being as famous as it is now and its price was relatively low. Through in-depth research on Bitcoin's underlying technology, blockchain, and its decentralized philosophy, he firmly believed that Bitcoin had enormous development potential. Therefore, in the following years, he insisted on regularly investing in Bitcoin. During this period, the cryptocurrency market underwent multiple bull and bear transitions, and Bitcoin's price fluctuated significantly. In the bull market, many people around him were crazily speculating on various altcoins, making huge profits, but Old Zhang remained unaffected, continuing to invest in Bitcoin regularly. In the bear market, when Bitcoin's price plummeted, many panicked and sold, but Old Zhang seized the opportunity to increase his investments. After years of accumulation, Old Zhang had amassed a large amount of Bitcoin. By the peak of the bull market in 2021, the value of the Bitcoin he held had grown hundreds of times. Through long-term adherence to value investment and strict adherence to his investment strategy, Old Zhang successfully navigated multiple bull and bear markets, achieving tremendous wealth growth in the cryptocurrency market.
Case 2: The Survival Strategy of Flexibility
Little Li is a relatively young investor who entered the cryptocurrency market relatively late, brought in by friends during the bull market of 2017. When he first entered the cryptocurrency market, Little Li blindly followed trends, chasing highs and cutting losses, resulting in buying some altcoins at high prices towards the end of the bull market. With the arrival of the bear market, his assets significantly shrank. However, Little Li was not defeated by this failure; he began to seriously learn about cryptocurrency investment knowledge, studying various technical analysis methods and investment strategies. In later market conditions, Little Li no longer followed trends blindly but operated based on his own analysis and judgment. For instance, when DeFi concepts emerged in 2020, Little Li discovered some promising DeFi projects through in-depth research. He bought related cryptocurrencies early and set reasonable stop-loss and take-profit points. When the prices of these projects rose to his take-profit targets, he decisively sold, achieving good returns. At the same time, Little Li would flexibly adjust his investment portfolio based on market changes. When the overall market was poor, he would reduce his positions and hold more cash; when the market showed a clear upward trend, he would gradually increase his investments. Through continuous learning and adaptability, Little Li gradually established himself in the cryptocurrency market and achieved steady growth in his assets.
These successful survival and profit cases all share a common characteristic: they have clear investment strategies and can strictly execute them. Whether it is long-term value investment or flexible swing trading, they can adhere to their principles and control risks in the complex and ever-changing cryptocurrency market, thus seizing opportunities to achieve profitability.
In this battlefield of opportunities and challenges in the cryptocurrency market, surviving is indeed the prerequisite for ultimately winning. Through reasonable capital management, strict adherence to stop-loss and take-profit, staying away from high-risk leverage contracts, and continuous learning and research, we can improve our chances of survival in the cryptocurrency market. I hope all cryptocurrency investors can remember the phrase 'Survive in the cryptocurrency market to have a chance to win' and move forward steadily amidst the waves of the cryptocurrency market to realize their wealth dreams.
