The core logic of making money in the cryptocurrency market is the combination of 'trend luck + scientific strategy', where the market dividends brought by the trend (i.e., luck) are the main factors. However, whether sustained profits can be achieved depends on whether low-risk strategies, capital management, cognitive iteration, and other scientific methods are applied within the trend. The following is a specific analysis:

Trend dividends (luck) are the basis for making money

  1. Wealth effect of bull market cycles: In the cryptocurrency market, there is a bull-bear cycle every 4 years, during which the average increase of cryptocurrencies can reach 10 to 100 times during the bull market. For example, in the 2020-2021 bull market, Bitcoin rose from $3000 to $69,000, and Ethereum rose from $100 to $4800. This overall upward trend in the market allows even passive holders of mainstream coins to achieve huge returns, essentially 'standing on the trend's windward side.'

  2. Opportunities for sector rotation: Different sectors (such as public chains, DeFi, NFT, GameFi) will take turns to explode in a bull market. For example, the public chain sector (Solana, AVAX) rose over 100 times in 2021, and AI concept coins (FET, AGIX) averaged a 50 times increase in 2024. Investors who can layout these sectors in advance will gain far more than merely holding Bitcoin, but the timing and duration of sector explosions are uncertain and depend on sensitivity to market sentiment and capital flow.

  3. The catalytic effect of policies and regulations: For example, after Hong Kong opens compliant trading in 2025, capital influx drives Bitcoin prices up 20% in the short term, allowing early investors to reap substantial profits. However, policy benefits are time-sensitive, requiring quick responses and risk control.

A scientific strategy is the key to continuous profit.

  1. Utilization of low-risk strategies:

    • Staking mining: Stake Bitcoin or Ethereum to the network, with an annual yield of 4%-18.5%, suitable for long-term holders. For example, staking 100,000 yuan in ETH can yield 18,500 yuan per year, and no complex operations are required.

    • Liquidity mining: Provide liquidity on platforms like Uniswap, with an annual yield of 5%-50%, but bear the impermanent loss caused by token price volatility. By choosing stablecoin pools (like USDT/USDC), risks can be reduced, yielding 10%-15% annually.

    • Grid trading: Set a price range (like Bitcoin at $30,000-$40,000), buy automatically when it drops 5%, and sell automatically when it rises 8%, suitable for a volatile market. A programmer in Shenzhen named Xiao Li used 100,000 yuan in capital to earn a steady 3,000-5,000 yuan per month.

  2. Iron rules of fund management:

    • The '30-30-30 rule' distribution: 30% of funds to buy Bitcoin, Ethereum, and other 'hard currencies', 30% to invest in high-potential coins (like Solana, BNB), and 30% kept as cash for bottom fishing. For example, when Bitcoin drops to $20,000 in November 2024, use cash to buy, and it rises to $30,000 three months later, directly earning 50%.

    • Take profit and stop-loss mechanisms: Set a take-profit line (like selling half of the capital when earning 50%) and a stop-loss line (like selling all when losing 20%). In 2021, when Bitcoin rose to $69,000, smart investors sold half, and when it later dropped to $15,000, they instead made more profit.

  3. Cognitive iteration and information advantage:

    • In-depth research on project fundamentals: Screen quality projects through white papers, team backgrounds, and community activity. For example, those participating in the PEPE coin initial offering in 2023 saw it surge 200 times, but must avoid the 'air coin' trap.

    • Utilize on-chain data to monitor capital flow: Use tools like Glassnode to observe institutional movements (like Grayscale increasing Bitcoin holdings) as buy/sell signals. In 2025, when Grayscale increased its holdings by 100,000 Bitcoins, market bullish sentiment intensified.

Risk control is the bottom line for survival.

  1. Avoid high-risk behaviors:

    • Leverage trading: Under 10x leverage, a 10% drop in price can trigger a liquidation. Statistics in 2023 show that 98% of people who engage in contracts ultimately face liquidation, and even big players warn that 'novices trading contracts are just giving money to the market.'

    • Chasing highs and selling lows: Blindly chasing hot coins (like Meme coins) can easily lead to being trapped. For example, after Dogecoin surged in 2021, many investors bought at high prices, only to see the price drop 90% afterward.

  2. Safe storage of assets:

    • Cold wallet storage for large amounts: Store mainstream coins like Bitcoin and Ethereum in hardware wallets like Ledger, keep the mnemonic phrases safe to avoid hacker attacks.

    • Choose a compliant exchange: Trade through licensed exchanges like Binance and OSL to reduce the risk of platform collapse. The FTX exchange crash in 2022 caused countless investors to lose everything.

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