Although I started buying Bitcoin in 2015, I have fallen into new pitfalls with each cycle. Recently, the market has been poor, providing the opportunity to review the pitfalls encountered in this cycle as a warning to myself, and hopefully, if it can inspire others, that would be great. Let's begin the main content.
1. Don't worry about fluctuations in your account balance. My account balance peaked in early 2024, and as of January this year, it was about 10% lower than that peak. Even knowing that January was already a high market, I still fantasized about hitting a new high, which led to significant losses later.
2. Do not develop feelings for altcoins, not even ETH. I started holding ETH in 2017 and didn’t sell even during the bear markets of 2018 and 2019. ETH once brought me wealth. Although I vaguely felt in 2024 that ETH’s biggest issue was that its leadership only had a programmer's mindset, lacking a product-oriented mindset, I set aside this concern when ETH reached 4000 USD. In retrospect, replacing ETH at any time could have reduced sunk costs.
3. Give up on predictions and focus on valuations. In January 2025, through a misguided understanding, I was confident that Bitcoin would exceed 120k, so I held onto it without selling, which led to asset depreciation, indicating that inductive reasoning is not always accurate. Observing ETF inflows and outflows, MVRV, altcoin indices, and other metrics can indicate whether the market is overvalued, and you don't need many indicators; a few familiar ones are enough; having too many can actually hinder your judgment.
4. Invest heavily in potential projects. OP, ARB, ZKSYNC, Starknet, and similar projects are worth significant investments for yield farmers. Although their secondary market performance is poor, their airdrops are very generous, allowing for costs of dozens of U to yield at least hundreds of U. It is feasible to generate 1 million RMB from 100 accounts. Unfortunately, I didn’t fully expand my accounts at that time.
5. Do not stake non-stablecoins. I have staked TIA, ATOM, and Pyth for about a year, but only received the DYM airdrop; now these coins have dropped by more than half. The life cycle of VC coins is only 3-6 months. If the price doesn’t rise after this period, it’s hard to expect any future performance.
6. Bitcoin should account for over 80% of your holdings at all times. Compared to the last cycle, altcoins are much weaker this round, possibly due to the sheer number of coins and the lack of a major liquidity injection like last time. The next cycle may see even more pronounced differentiation. Thus, the trend of altcoins going to zero is accelerating, while Bitcoin remains consistently strong.
7. Profit-taking and stop-loss strategies are lessons to learn in every cycle. Don’t fantasize about selling at the peak; selling a portion in an overvalued area is already quite good. Don’t hold on because you fantasize that a 10x drop will recover; you must cut losses when necessary, even if it means a 50% drop, because preserving your capital is your only baseline for continuing to participate in this game.