Imagine if Bitcoin's price were still like the 4,000 yuan per square meter housing price in Beijing in 2008, wouldn't you think that the current $60,000 is absurdly expensive? But some people don’t think so. They believe that Bitcoin still has great potential for growth!
Take the data for example, Bitcoin's current market capitalization is about $1 trillion, while gold's market capitalization is $12 trillion. Would you say this is a big gap? What's more interesting is that less than 10% of the top 100 richest people in the world hold Bitcoin. What does this indicate? It indicates that Bitcoin's potential has not been fully tapped!
Some people even boldly predict that if Bitcoin can reach 50% of gold's market value, then its price would have to break through $300,000. If it really becomes a global reserve asset, the price could even exceed $1 million! Would you say this dream is big? But remember, dreams are always necessary; what if they come true?
Let’s talk about inflation. The current fiat currency is rampant, and it feels like money is becoming less valuable. But Bitcoin? It is a little 'anti-inflation' champion. Why do I say this? Because its total supply is fixed at 21 million coins, and it will never be increased. This is like having a piece of gold that will never depreciate; doesn’t that make you feel more secure?
Moreover, you need to pay attention to a phenomenon, which is the 'capital channel' between the US stock market and the crypto world. The US stock market is the lifeblood of the American economy; it cannot fall, so the government can only keep injecting liquidity. Where does that liquidity go? A part of it flows into the crypto world. Do you think this is a big opportunity?
Let's talk about the miracle of compound interest. If your principal is small, don’t be afraid, just live long enough. An annual return of 100% can multiply your investment a thousand times in ten years! This is not just me talking; someone spent $1,000 on Bitcoin in 2013, and by 2021, it turned into $10 million. Would you say that's not a profit?
But ah, you also have to be careful. Trading cryptocurrencies is very risky, and if you're not careful, you might lose everything. Just like some people who went all in on SHIB with 100x leverage in 2021, only to find their investment wiped out to zero. So, you have to first learn to 'not lose' to thrive in the crypto world.
Finally, I must say that blockchain might very well be the only road to wealth for ordinary people after real estate. Why do I say this? Because real estate has high barriers to entry and poor liquidity, while blockchain has low barriers to entry and strong liquidity, allowing for trading 24 hours a day. Would you say this opportunity is rare?
So, trading cryptocurrencies can lead to financial freedom, but the premise is that you must first learn to protect yourself and not let yourself suffer too much loss. Remember, in the crypto world, those who live long enough will eventually become rich, while those who become rich may not necessarily live long. So, we must be cautious!
In trading cryptocurrencies, from my years of experience, the majority lose money, while only a few make profits. If you don’t understand the underlying principles and haven’t improved your understanding, then it’s better not to play. Although this game can allow ordinary people to turn their fortunes around, it has actually doomed most greedy individuals and further proved that ordinary people are just that—ordinary.
To survive in the crypto world, you must understand what game you are playing; it’s a trial of human nature. No one can lie because money is the most real thing. Once you are not honest with yourself, you will inevitably incur losses. Some people deceive themselves without realizing it, eagerly hoping to achieve wealth through a few candlestick patterns, news, and recommendations from others, which is nothing but a pipe dream.
The crypto world is a game of human nature; if you don’t have a profound understanding of human nature, no matter how much you learn or understand, it will be in vain. In my view, to make money in crypto, you have to have knowledge.
The first factor is mindset. A great mindset is key to making money in this market. Position size can affect mindset, the ability to make money off-market can affect mindset, and social circles can affect mindset. I see many people with sparkling eyes when they first dive in, but after a few months, their eyes are already clouded with confusion.
The second is the truth of human nature. You must learn to restrain greed and desire; don’t think about eating from beginning to end, and don’t have unrealistic ideas about bottom-fishing and top-selling. I’m fine with just making a portion in between; let the rest of the wealth be passed on to others, generously giving it away. Ultimately, all the wealth we have will be given to others. What does it matter to give away altcoins? Greed will ultimately kill you. Learn to control yourself when prices are rising and learn to sell. During a big drop, when others panic, you must not panic; the root of not panicking comes from position management. If you believe in the hype of becoming rich quickly, you will be seen as cannon fodder by others.
Third, be diligent in learning and improving your understanding. Understanding is the summary of the rules of things, derived from your own experiences and others' experiences. Standing on the shoulders of others can help you fly faster; being friendly to others can create many more opportunities. Only with understanding can there be understanding gaps, and the understanding gap is the fundamental element of making money. A good mindset is greater than controlling human nature, which is greater than understanding. The rest is up to time; with these, you will eventually encounter opportunities.
