Can money still be made in the cryptocurrency world? How to change one's social class?
From 2008 to now, every year I have been able to make money. In the early days, there were not many contracts on exchanges, but the spot fluctuations were huge. Before 2017, mainly trading around ETH and BTC spot, making a fortune. In 2017, there were ICOs everywhere; casually trading a coin could yield ten to twenty times in one night. In 2019, $100 ETH and $3000 BTC, holding until 2021 yields over ten times profit. In 2022, the Luna situation gave a week of shorting opportunities; anyone who shorted made some profit.
A cruel truth is: since 912, the market has been relatively good; how many people have made money? The future bull market will be a double replica of this situation. Is it cruel?
As we move into 2024, it seems there is no significant market activity; the first half is average, the middle of the year is stagnant, and the second half sees altcoins rise, which gives a wave of opportunities while you are still observing and asking? Not taking action is always meaningless; if you think this is a scam, you can definitely go play in the A-shares...
Recently following a few altcoin contracts:
In the cryptocurrency world, following the big players is just a matter of earning more or less; when the market is good and the depth is sufficient, one can earn a lot, otherwise, one earns nothing or very little.
Remember, not losing is gaining; my personal risk strategy is extremely averse to losing principal!
You can see that these coins are all going long. Remember that the funds daring to push the rise in the market are all from the same wave of capital. When new hotspots emerge, the funds in old hotspots will flow out to chase new hotspots. When the market shifts to the latest hotspot, the previous hotspot begins to bleed, and the second-to-last hotspot starts to accelerate its bleeding. This is often when the manipulators start unloading in the mid-to-late stages. Do not short the continuously rising mad dogs, and do not pick up coins in front of a road roller. This is my summary from years of trading in the market.
This point can also filter out many significant wrong opportunities, preventing one from stubbornly shorting when the real bull market returns and missing the entire bull market. After all, all short sellers who do not turn bullish in the end will be wiped out.
Making money in the cryptocurrency world is not difficult; with several tens of millions or half a billion in funds, one can manipulate altcoins, driving prices up and offloading to trap others; one can also open contracts explosively.
There is a secret to making big money in the cryptocurrency world; to put it simply, it relies on the help of benefactors. To make small money, rely on one's own intelligence and diligence. To make big money, one needs the help of benefactors. Most people will never understand this rule in their lifetime because their character is problematic, so they do not gain the recognition of experts and thus cannot make money.
In fact, every word and action of yours is known to the experts, so it is best to be as sincere as possible in front of them. The reason your fate is so tumultuous is that you have not proven to the experts that you are a good person. The most powerful strategy in society is to listen to the words of capable people; as long as that person is more capable than you, you listen to them, regardless of what they say. People with capabilities in society are usually wealthy; they are generally very smart, which is why they can be rich and capable. So just learn from them; do what they do, don’t ask why, because if you ask, you won't understand. If you could understand, you would have been rich by now.
I will tell you how to quickly find the right person and then learn from them. You only need to observe this person to see if they have achieved huge results in this field, speaking with results. Do not pay attention to small-time players who have no money.
If you observe the recent wave of altcoins, you will find that basically, these rates are all ridiculously negative.
The play with negative funding rates will be very interesting; negative funding rates generally need to wait until they are full before there are better reference values. The funding rates at full levels will vary among different altcoins, with the lowest at -1.5%. If the premium continues, it will continue to upgrade to -2%, -2.5%, -3%; a common situation is that most altcoins' full negative funding rate is -2%, but recently due to certain altcoin operators, Binance has adjusted these altcoins' full negative funding rates to -3%.
Having said so much common sense, how does a full funding rate guide trading? Let’s see how a full funding rate is generated and what exactly happens in the market that leads to a full funding rate. Previously mentioned, Binance's funding rate calculation formula is currently the most reasonable among all exchanges, namely calculated through depth weighting and time weighting. Below, I will share the premium index formula for your understanding:
Premium Index = [Max (0, Impact Buy Price - Spot Index Price) - Max (0, Spot Index Price - Impact Sell Price)] / Spot Index Price
Firstly, the rise of altcoins is definitely initiated by the spot market (it absolutely cannot be initiated by the contract market), and then contracts are coordinated. The big players will inevitably layout in both the spot and contract markets simultaneously; because the spot market requires real coins for trading, while the contract market does not need that; it only needs to anchor the spot through the contract system. Therefore, once a significant rise occurs, it is basically inevitable that the price in the spot order book will be higher than that in the contract order book. At this time, the first value in the premium index:
Max (0, Impact Buy Price - Spot Index Price) will always be 0, because the value of Impact Buy Price - Spot Index Price is negative, and Max(0, negative number) is zero. The next value that affects the premium index is: Max (0, Spot Index Price - Impact Sell Price), which will take the value of Spot Index Price - Impact Sell Price.
By now, I wonder if everyone has had a moment of enlightenment; that is, when the funding rate is negative, the calculation of the negative funding rate is completely influenced by market sell orders. At this time, the larger the market sell order volume, the faster the funding rate will turn negative; but this does not mean that there are very few buy orders in the contract market. Many people will think that when the funding rate is negative, there are a lot of people shorting. In fact, in the contract market, for every short position, there will be a corresponding long position. A negative funding rate does not mean that a lot of people are shorting; instead, it indicates that the spot and contract markets have generated high premiums. This high premium is the essential reason for the negative funding rate, not because many people are shorting that leads to a full funding rate. If you can fully understand this point, congratulations, you have surpassed 90% of the people in the contract market. Since you know the essence of the full negative funding rate, how can you use this feature for trading? As mentioned earlier, the essence of the full funding rate is the high premium in the spot market. So how do we eliminate this high premium? You can filter out 10-20 altcoins that have reached a full funding rate 1-2 times, and you will find that after reaching a full funding rate 1-2 times, over 90% of altcoins will choose to significantly pull back in price to eliminate this high premium, not by continuing to rise in price. What is the essential reason behind this statistical phenomenon? The real reason should be quite complex, or difficult to explain. One reason is that manipulating prices requires real capital; once prices are manipulated in the spot market to create a high premium, the increase is typically at an exaggerated level. At this time, accompanied by a rapid rise in trading volume and positions, a large number of traders will flood in. When too many traders participate, the difficulty and risk of the big players controlling the market will increase, so at this time, they face a significant price pullback for consolidation.
Most manipulators like to make surprise attacks; the key is to be fast, accurate, and ruthless. The price manipulation is fierce, and during unloading, they hit hard.
Different systems, a new strategy, including different levels of tuition fees, are very expensive, which is closely related to the amount of capital.
Trading goes through different stages; when capital is small, one only needs to focus on one or two things to do well, and the leverage ratio is relatively high. Losing a few bucks is just a matter of working for a few years.
The leverage ratio at the million level decreases, and the trading frequency also becomes lower. The trading and management methods at this stage become different. It starts to require a bit of sharing, because at this point, losing money is not just a matter of working for a few years to recover; if you lose everything, it is also very difficult to earn it back, requiring a reduction in risk appetite.
Further up, due to scaling reasons, it becomes almost unleveraged, with even greater risk aversion, frequency becomes lower and one must look at the overall situation because assets must consider macro conditions of the industry and need to think ahead and diversify into some unrelated areas, but diversification does not guarantee positive returns; investing in fields one does not understand could lead to total loss. However, these investments will also consume time and energy. How to balance time and energy requires personal reflection.
