What are the truly profitable people thinking when the market is in panic?

"If you spend 14 minutes a year studying macroeconomics, you waste 12 minutes." — The words of investment legend Peter Lynch seem even more worthy of reflection in the highly volatile crypto market.

When BTC drops 30%, MEME coins go to zero, and altcoin projects frequently exit, are you always anxious about the Federal Reserve's interest rate hikes, geopolitics, or market manipulation?

Lynch's answer is straightforward: Forget about macro noise, focus on what you can control.
The following 10 principles will help you transition from 'emotional trading' to 'value thinking', compiled from Lynch's 40 years of practical experience, adapted for crypto market logic 👇

1/ Look for projects that are 'simple to boring'

"If you don't understand the white paper, don't touch it."
Why has Bitcoin become the king of consensus? Because the rules are transparent, and the demand is clear: total supply of 21 million, anti-inflation, peer-to-peer payment.
Projects that can weather cycles often meet three points:

  • Clear business model (e.g., ETH as smart contract platform, UNI as DEX infrastructure)

  • Stable cash flow/income (e.g., BNB relies on trading fees, Lido relies on staking rewards)

  • Strong community consensus(Loyalty of BTC and DOGE holders)
    Remember: Complex narratives ≈ High risk, the first to collapse in a bear market are 'story coins'.

2/ Give up on predicting macro, focus on project fundamentals

In 2022, LUNA collapsed, FTX exploded, the Federal Reserve raised interest rates... these black swans were not predicted even by top institutions.
Instead of worrying about 'will BTC drop to 10,000', why not ask:

  • How active are the developers of this public chain? (GitHub data)

  • Is protocol income consistently growing? (Check cash flow on TokenTerminal)

  • Is the token economy reasonable? (Inflation rate, unlock time, use cases)

3/ Distinguish 6 types of assets, adjust your expectations

Lynch categorizes companies into 6 types, applicable to the crypto market as well:

| Type | Crypto Case | Strategy |

| Cyclical | Mining stocks (e.g., BTC mining companies) | Buy low, sell high, track hash rate costs |
| Conservative | BTC, ETH, BNB | Long-term regular investment, ignore fluctuations |
| Asset-based | Staking tokens (e.g., ATOM, SOL) | Earn interest, wait for ecosystem explosion |
| Reversal | Undervalued old public chains (e.g., ADA) | Ambush narrative repair |
| Fast-growing | New sector leaders (e.g., AI sector FET) | High volatility, require stop-loss discipline |
| Slow-growing | Stablecoin protocols (e.g., MAKER) | Low risk, earn stable returns |
| Focus on 'fast-growing', but strictly control position (≤10%)! | | |

4/ Profit growth = The ultimate fuel for token appreciation

Why did ORDI soar 100 times in 2023? Because it hit the explosion of BTC ecosystem income (inscription minting gas fees surged).
Bear markets test the true gold:

  • L2 sector ARB/OP relies on on-chain trading fee growth

  • RWA sector ONDO captures US Treasury yield dividends

  • Even if BTC is sideways, these projects can outperform the market based on fundamentals.

5/ Buy 'anti-fall necessities' in a bear market

When the market crashes:

  • Cutting priority: NFT > GameFi > Meme > Public Chain > Stablecoin

  • Defensive configuration:


    • Decentralized stablecoins (e.g., LUSD, DAI)


    • Infrastructure (e.g., cross-chain bridge STG, oracle LINK)


    • Yield-generating protocols(e.g., lending platform AAVE, derivatives GMX)
      Remember: No one will sell income-generating assets during a major drop.



6/ Valuation is more important than imagination

In 2021, many metaverse projects had FDV (Fully Diluted Valuation) exceeding hundreds of billions, now only remnants are left.
Avoid pitfalls with data:

  • PEG Indicator: If the token PE (Market Cap/Annual Protocol Income) > Profit Growth Rate, it indicates overvaluation

  • TVL/Market Cap Ratio: The higher the proportion of TVL (Total Value Locked) to market cap, the stronger the margin of safety (e.g., MKR ≈ 50%)

  • On-chain address count: Does user growth match the price increase? (Beware of manipulated coins)

7/ Give up on 'precise bottom-fishing', learn to build positions in batches

No one can buy at the lowest point, but you can:

  • Pyramid scaling: Increase position every 10% drop (e.g., BTC from 60k to 40k, buy in 5 increments)

  • Regular investment strategy: Invest a fixed amount weekly/monthly in BTC + ETH to smooth costs

  • Panic Indicator Assistance: When the Greed and Fear Index <20, initiate left-side layout

8/ Long-term holding > high-frequency timing

Data shows: If you miss the 5 days with the highest gains from 2020-2023, BTC returns will be reduced by 60%.
The secret to holding quality assets:

  • Turn off contract leverage, invest only with idle money

  • Block out short-term noise (Twitter calls, group chat FOMO)

  • Regularly review logic (is project progress on track?)

9/ Turn volatility into a friend

In 2022, LUNA went from 119 to 0.0001, but if you bought at the bottom and held until the 2023 peak, the return exceeded 500 times.
Choose one of two strategies:

  • Extreme volatility arbitrage: Grid trading BTC/ETH, capturing swing profits

  • Low-risk passive approach: Hold BTC + ETH + stablecoin investments, annualized 8%-15%

10/ Concentrate your firepower, refuse to spread too thin

If you have $50,000:

  • ❌ Incorrect approach: Buy 50 altcoins at $1000 each

  • ✅ Correct allocation:


    • 70% BTC + ETH


    • 20% High-growth sectors (AI, Depin, RWA leaders)



10% cash waiting to buy the dip in the cryptocurrency market, 99% of people lose from overthinking, while winners do simple things: find good assets, trade time for space.