The high volatility and high risk in the cryptocurrency world have indeed caused significant losses for many, especially beginners who are easily attracted by stories of sudden wealth while ignoring the risks. Here are some hard-learned lessons and advice that may help you:
1. Always remember: Capital safety comes first
Assume that the money you invest could go to zero; only use disposable income that you can afford to lose (for example, no more than 5% of your assets).
Do not borrow, do not use leverage! The cryptocurrency market is already extremely volatile, and leverage will accelerate liquidation.
2. Beware of "FOMO" (Fear of Missing Out)
When you see prices skyrocketing or plummeting, the chances of ordinary people catching the falling knife are much higher than making money. The market manipulators are harvesting emotional-driven retail investors.
Case in point: After the surge and fall of Dogecoin in 2021, countless people bought at the peak and got trapped; in 2022, many still bottom-fished before Luna's collapse.
3. Don't believe in the "sure-win" myth
Projects like Shitcoin B, Ponzi schemes (like Squid Game Token), and high-interest investment products (like BlockFi's collapse) are all disguised traps.
If someone recommends a "hundredfold investment", assume they are a scammer first.
4. Learn basic on-chain skills
Check wallet addresses (like Etherscan), token distribution, and the background of the project team by yourself.
Do not click on unfamiliar links; be cautious of wallet authorizations that could lead to token theft (over $1 billion lost annually this way).
5. Bear markets are more important than bull markets
Everyone is a "master" in a bull market, but bear markets are the time to position yourself. However, most people cannot endure the cycle.
Historical data: BTC has dropped 70%-85% in every bear market, but each new high is typically an order of magnitude greater than the previous one.
6. Diversify risk, but don't over-diversify
Keep BTC holdings above 70%, and control the proportion of smaller tokens (big investors may only play with BTC).
7. Establish a stop-loss discipline
Set a hard stop-loss line (for example, -20%); exit unconditionally if breached.
Remember: to recover from a 50% loss, you need a 100% gain.
8. A long-term perspective against short-term volatility
If you believe blockchain is the future, dollar-cost averaging into BTC (fixed amounts weekly/monthly) is more prudent than going all-in.
But the premise is that you can withstand an 80% drop without panic selling.
A harsh truth:
"Only three types of people make money in the cryptocurrency world: those who create tokens, those who operate exchanges, and a very small number of highly disciplined holders— which one do you want to be?"
Supplementary advice: After losing money, pause trading, learn the basics, recognize your risk tolerance before deciding whether to continue. Remember, leaving the gambling table is also a victory.