Whether you are in the cryptocurrency market or not, as long as you pay a little attention, you will always be tempted by those 100x or 1000x wealth creation news, and you can't help but substitute yourself into it, and then go to the table to play.
However, only after truly participating in it will you find that behind the few lucky ones who get rich quickly, the vast majority are just unknown cannon fodder or even lose everything.
After years of working in the crypto market, I've learned these 18 lessons:
01
Don't assume anyone will look out for you
Even if you feel like you are part of the cryptocurrency Twitter community, and you feel like you belong to a big family, in reality, you are fighting alone in this market. The cryptocurrency market is a "player-vs-player" arena, where everyone is pursuing their own interests.
No one will truly consider you; all decisions and actions revolve around self-interest. Therefore, you need to be vigilant and rely on your own judgment, rather than expecting the kindness of others.
02
Information asymmetry on Twitter is extremely high
On social media platforms like Twitter, information asymmetry is very serious. Some influencers may have more inside information or market dynamics, while ordinary investors are often at a disadvantage. To make informed investment decisions in the cryptocurrency market, you need to know who is a truly valuable source of information.
Follow the right people and you might get a huge "alpha"; blindly follow the wrong people and you might lose everything. Learning to distinguish the reliability and motivation of information sources is the key to successful investing.
03
Trust your own judgment
When market sentiment fluctuates, other people's advice is often unreliable.
When the market is rising, if you ask others what to buy now, they may say, "Buy at a market high? Are you stupid?"
When the market is falling, if you ask others what to buy now, they may say, "Everything is over, buying now is stupid."
These feedbacks often reflect the extreme polarization of market sentiment, rather than objective advice. Therefore, learn to trust your own analysis and judgment, and don't be swayed by the emotional remarks of others.
04
Stay away from echo chambers
On Twitter, it's easy to fall into "echo chambers," where you only hear voices that agree with your own views. Don't use social media to seek confirmation bias; instead, use it to test and challenge your investment ideas.
For example, if you are considering investing in a popular token (such as "HYPE"), in addition to paying attention to the voices that support it, you should also actively look for opposing opinions. Perhaps you have overlooked some key risks or issues. Maintaining an open mind can help you make more comprehensive decisions.
05
Spend time on valuable things
Instead of arguing with anonymous people online, spend your time on more productive things, such as:
Read the project whitepaper and learn about the project's technology and business logic in depth;
Experiment with related applications on the chain and experience their functions and potential firsthand;
Interact with the community on Telegram or Discord, ask questions, and get first-hand information;
Record your investment ideas and write down your investment logic.
Thinking on paper can help you organize your thoughts more clearly. Writing down your investment arguments before investing allows you to assess decisions more rationally and avoid emotional actions.
06
Don't let other people's gains shake your beliefs
Seeing others make a lot of money in a short period of time can cause you to feel fear, doubt, or fear of missing out on your long-term holdings. But you must remember that the investment logic of long-term holdings is calculated in years, not in weeks or days.
If your investment thesis still holds, stick with it; but if the fundamentals of the market or the project have changed, sell decisively. Never "fall in love with your positions"; maintaining flexibility and rationality is crucial.
07
Emotional Management in Trading
Emotions are often the biggest enemy in trading. Here are some tips:
If you feel overly excited about a position, consider selling;
If the price of an asset suddenly skyrockets, sell decisively.
The market cannot rise forever; the key to long-term survival is learning to lock in profits. Greed may cause you to miss the best exit opportunity.
08
Understand the source of yield in Decentralized Finance (DeFi)
In DeFi platforms, if you can't clearly explain the source of the yield in two sentences, then you are likely the "source" of the yield. In other words, you may be providing liquidity or taking risks for others without realizing it. Before investing in DeFi projects, be sure to understand their economic model and risk points.
09
Narrative is everything
In the cryptocurrency market, narrative is the core force driving prices. The stories that market participants collectively build can greatly affect the value of assets. For example: (Dogecoin) once had a total market value of nearly 100 billion US dollars, which was entirely the result of narrative-driven.
This reminds me of a saying: "Do you want to make money, or do you want to prove you're right?" In the market, following the narrative is often more rewarding than sticking to being "right."
10
Don't chase highs
When you find a new project and think, "Wow, this idea is great," but delay investing for weeks, don't chase it when its price suddenly skyrockets. Your best investment opportunity was missed weeks ago. Rushing in now will likely result in buying at a local high. Learn to accept missed opportunities and patiently wait for the next one.
11
Emotions are temporary
When you start making money, you may feel extremely excited, a feeling that is addictive, and you will want to constantly recreate this pleasure. However, over-trading or frequent rotation of positions often stems from chasing this feeling, rather than rational investment decisions. Learning to control your emotions and stay calm can help you avoid unnecessary losses.
12
Understand market cycles and sector rotations
In a bull market, not all assets rise at the same time. Usually, there are different phases in the market, and certain sectors (such as DeFi, NFTs, Layer 2, etc.) take turns performing. Pay close attention to emerging narratives and trends, and plan ahead instead of chasing sectors that have already taken off. Plan your investment strategy well to gain an advantage in market rotations.
13
Mistakes are cheaper to make when you are young
Making mistakes in your 20s is much less costly than making mistakes in your 40s; learning from a $1,000 loss is much easier to bear than learning from a $100,000 loss. The first time I tried leveraged trading, I lost several thousand dollars in minutes, but this failure taught me valuable lessons. Failure is part of growth, but make sure the cost of failure is within your affordable range.
14
Why Most People Don't Make Money in the Crypto Market
Ordinary investors are often at a disadvantage in the cryptocurrency market for the following reasons:
A YouTuber or big V promotes a project on Twitter, and the price starts to rise;
The token enters CoinGecko's top 100, attracting more attention;
KOLs, VCs, or early investors start selling when the price goes up;
The project becomes "well-known", and ordinary investors start buying in;
Retail investors buy in, pushing up the price, but the increase is limited;
KOLs, VCs, etc. sell all their holdings;
The token price plummets (usually while you're sleeping), and you're forced to cut your losses.
Understanding this pattern can help you avoid becoming a "bagholder".
15
Give yourself time
We all want to get rich quickly, but success in the cryptocurrency market takes time. Slow and steady wins the race. Of Warren Buffett's $84.5 billion fortune, $81.5 billion (more than 96%) was accumulated after he turned 65. This reminds us that patience and long-term perseverance are key to wealth accumulation.
16
You don't want retirement, you want freedom
Many people think retirement is the goal, imagining themselves lying on a Caribbean beach on vacation. But retirement life can become boring after a week. The real goal is freedom - waking up every day and doing what you want to do, creating value with interesting people, while having enough time to spend with family and friends. The cryptocurrency market may provide you with financial freedom, but don't forget to pursue more meaningful life goals.
17
The cost of doing crypto full-time
If you want to quit your stable 9-to-5 job and go full-time into the cryptocurrency market, ask yourself if you are prepared to be online 10 to 16 hours a day, 7 days a week, for years. Even then, there is no guarantee of success. Going full-time into the crypto market requires extreme discipline, patience, and mental resilience.
18
Reflections after success
When you "succeed" in the cryptocurrency market, you may find that it's not what you initially wanted. You have the money, but you are still you. Money doesn't solve all problems. If your only goal is money, you may feel empty or even depressed after success. Therefore, setting goals that are more important than money, such as personal growth, family happiness, or social contribution, can make your success more meaningful.
