I have seen too many scripts of overnight wealth in the cryptocurrency circle, but only two types of people can truly change their fate.
The cryptocurrency circle indeed has open windows, but 99% of people step on the wrong ladder.
You must have seen stories like this: a college student turns 5000 yuan into a fortune of ten million, and an unemployed uncle makes a comeback through DeFi. But no one tells you that behind these survivors are three deadly rules:
1. Use money that you won't regret losing to aim for hundredfold returns.
The real comeback players I know started with no more than 30% of their monthly income as their initial capital. In contrast, those who borrowed against their houses or cars to gamble couldn't even afford the gas fees during the 312 crash, watching their NFTs plummet in value. Those who dollar-cost averaged in bear markets are now in Sanya, while those chasing prices in bull markets are still delivering takeout. In 2020, I created a 'Bear Market National Currency Party' group, stipulating that discussions about the market could only happen every Thursday. As a result, when I opened the group last year, five out of seven had retired early. Meanwhile, another group that analyzed K-lines every day had 80% of its members blow up their contracts more than three times.
3. It's not code that changes fate, but the difference in information.
During last year's lockdown in Shanghai, an aunt at the market made more profit from exchanging USDT for groceries for neighbors than from selling vegetables for three years. She didn't understand what TVL+ or hash rate+ was, but she knew that the wealthy ladies in Jing'an District were afraid of starving and were willing to pay 20% more to buy groceries with stablecoins.
The three gates of life and death for ordinary people.
1. Cognitive tax (every wealth story collects an IQ tax).
"Bitcoin will hit $100,000" and "the country will ban it soon" are essentially the same kind of FOMO emotion. I’ve seen the worst-case scenario: a brother who, in 2021, believed "Filecoin will replace Alibaba Cloud,” used his wedding house down payment to buy FIL, and now he is being chased by his fiancée every day.
Liquidity trap.
Last year, when a certain meme coin skyrocketed, a group member made enough for a down payment at its peak. But then the exchange suddenly had 'maintenance' for eight hours, and after the price halved, he couldn’t even afford toilet paper. The cruelest truth in the circle: paper wealth only becomes money when it can be withdrawn.
3. Survivor's curse.
One of my early apprentices made his first bucket of gold on Dogecoin and now criticizes anyone who mentions 'technical analysis' as nonsense. As a result, he lost all his five years of profits in just three days last year when he invested in AI in Luna. The scariest thing in the circle is not going to zero, but that those who have made quick money can no longer appreciate the importance of being grounded.
Three correct approaches for ordinary people.
1. Use a grocery shopping mindset to trade coins.
I know a programmer who compares prices across three apps every time he buys groceries. He applied this method to the cryptocurrency circle: comparing prices on the three major exchanges at the same time, he saved up a down payment through arbitrage over three years. Remember, the auntie who can haggle at the market has lived longer in the coin world than the 'financial elite.' 2. Treat exchanges as enemy-occupied areas; ask yourself before every deposit: can I survive if this money is frozen for six months? I set a strict rule for myself: once profits exceed the principal, withdraw them to a bank card that can no longer be used in the exchange. Remember, the money left in the exchange is all 'temporary storage.' 3. Join an antifragile community + Last year's LUNA collapse + that night, my "Doomsday Survival Group" suddenly became active. Some taught how to use cross-chain bridges to rescue assets, some shared hedging strategies, and even someone sent red packets on Meituan to help brothers order takeout. What can really change your fate is how many hands you can find to help you during the storm.
After losing 580,000 to a meme coin, I realized: the most expensive thing in the cryptocurrency circle is not tuition, but that no one tells you which pits have been stepped on by predecessors. If you are also playing in the cryptocurrency circle, I sincerely hope this article can help you. As someone who has decent summarizing skills and can express myself fairly well, I believe some of my thoughts may be helpful to you. Alright, enough talk; let’s get straight to the point.
1. Be sure to keep records.
Try to record your feelings and operational details at that time because words do not lie. Only through authentic records and serious summaries can you find direction for the next correct decision.
Honestly, being able to personally experience and witness such historic moments is a rare growth opportunity. In other words, this kind of experience is a necessary path to becoming a mature investor. As the saying goes, only by experiencing it firsthand can you gain a broader perspective.
In the investment process, 'seeing is believing' is an illusion, but it is also the only magical power that can truly allow people to believe in and accumulate knowledge and experience. If this historic experience is not fully utilized and absorbed, it will truly be a waste of this precious opportunity.
2. Never go all in.
Whether in the cryptocurrency circle or the stock market, truly mature investors will not choose to always be all in.
Because black swan events—those extreme situations—are bound to happen, especially in a market as volatile as cryptocurrency. This seems like a simple truth, but it is very difficult to execute in practice.
Of course, you may have various reasons to go all in, such as having a small capital or believing that the asset you just bought is about to rise. Regardless, you will always be reluctant to let your money sit idle, feeling the impulse to invest it at any time. I completely understand this feeling. But reality always ruthlessly teaches those of us who are all in a lesson.
Therefore, I decided to set aside at least 15% of my position after the next wave of increases. I originally wanted to keep more, but I know I might not be able to part with it, so I’ll take it slow; after all, cultivation is not achieved overnight. This reserved capital will only be invested again when the market experiences a drop of around 30%.
3. A crash is the best test of human nature.
A crash is both a mirror reflecting human nature and a touchstone for it. Just like most people can share joy but find it hard to share sorrow, each drop not only causes the price to plummet but also reveals the truth of human nature.
In the past, I helped a few people I had never met make several times their money. Some were grateful and insisted on sending me coins as thanks; others felt very capable when they made money but shifted the blame to me once they incurred losses.
This crash especially highlighted these differences, and of course, I’m not foolish; after this, I am already clear on how to deal with these individuals.
4. Always buy only coins that make you feel secure holding them.
Honestly, the reason I didn’t panic this time is that for so many years, whether buying coins or trading stocks, I have only bought those I believe can be held for at least five years without any issues. This has become my amulet for a peaceful sleep.
Of course, I also have to admit that the various fluctuations in the market recently made me unable to resist buying some small coins, but because the amount was small, I can accept it even if it goes awry, so I didn't panic too much. I hope everyone can remember and follow this principle, as it will help you avoid a lot of trouble and significantly improve your quality of life. Only by holding genuinely high-quality assets can you truly find peace of mind.
5. An eternal bull market in the heart.
Another reason I’m not panicking is that I already have the confidence of having $100,000, so I am not afraid at all. I won’t elaborate on this point; in an industry where so many elites and capital have continued to invest for over ten years, it is inevitable that it will change the world.
So, don’t frighten yourself worrying about Bitcoin going to zero. If it were going to zero, it would have done so long ago. Oh, by the way, if you're familiar with history, you will understand a basic truth: reformers throughout history are often targets. That’s why Bitcoin has been sentenced to 'death' multiple times.
You could even say things are getting better and better. This alone is enough to prove its strength. Interestingly, Bitcoin still survives resiliently to this day; neither the strongest government nor the wealthiest individuals can truly bring it down. Doesn’t this echo Nietzsche’s famous quote: "What doesn’t kill me makes me stronger?"
6. After every drop, there must be a surge.
Looking back at Bitcoin's history, after every significant drop of about 40%, there is almost always a strong rebound, usually ranging from 20% to 30%, often occurring in the short term (like the next or third day). So don’t be afraid; dare to enter the market when others panic, believe in historical patterns, and don’t be scared by the current drop.
7. Don’t let news sway your investment decisions.
When the market is doing well, whether your thoughts or media reports, it seems to be filled with positive news; but during a crash, various sensational news emerge endlessly, typically appearing in a way that adds insult to injury, leaving you with no chance to breathe until you have thrown away your last chips.
Therefore, during extreme market panic, do not look at negative news; it is of no help. Remember the fourth principle we mentioned earlier—we always buy things that we can hold for at least five years, so don’t be led astray by others or bad media. Also, during a crash, avoid the various panic-inducing messages in the group; those small retail investors are already scared out of their wits and just want to pull you into the panic with them, so mute them.
8. Believe in the power of cycles.
The investment market is friendly to some people because they understand how powerful the cycles are. As long as humanity continues to develop, a bull market will surely follow a bear market. Even without mentioning the cryptocurrency circle, looking back at modern human history, has there ever been a financial crisis that truly made us collapse completely? Not to mention financial crises; even disasters like world wars that destroyed the physical world, people around the globe still rapidly rebuilt.
Therefore, during favorable cycles, you must have confidence. Entrust yourself to historical trends, patiently wait for the right opportunity to come, and let the bullets fly a little longer~
9. Always respect the market and dare to carve out new paths.
Market fluctuations will always be more severe than you imagine, whether rising or falling. For example, last week when Ethereum surged to $4300, how many people were willing to sell (I sold half at $3500, but unfortunately, later bought some altcoins)? Now that the price has returned to around $30,000, how many people dare to enter? This is one of the core reasons for investment success: walking the path others dare not walk to achieve excess returns! Although this principle is very basic, it is as difficult as a personal Odyssey in practice. In a bull market, everyone thinks trading coins is simple; just buy any coin, and it will multiply several times or even more than ten times. However, when the market surges, everyone may truly understand the meaning of 'holding coins as if guarding a widow.'
