Every person who enters the crypto world carries the same dream in their hearts — to achieve financial freedom through cryptocurrencies, no longer worrying about rent, and no longer needing to watch their boss's face. As Munger said: 'Becoming a rich person is for nothing else but freedom.'
But the reality is that the crypto world is harsher than the stock market; 'nine losses for one gain' is the norm. The vast majority of people become the backdrop for others' wealth stories, with only a very few able to roll up their small funds into a snowball.
Having been in the crypto world for 12 years, growing a $50,000 principal to its current scale, I have summarized 4 iron laws that small funds must engrain in their bones to grow.
First principle: Understanding the project is 100 times more important than watching the price.
Not researching the project before buying a coin is like crossing the street with your eyes closed. You at least need to understand:
Which track is this project in? Is it a public chain, DeFi, or NFT? Is there potential for an explosion in the next 3 years?
Is the team reliable? Does the founder have blockchain experience? How frequently is the code updated (check on GitHub)?
Is the token economy reasonable? What is the total supply? What is the circulating supply ratio? Is there huge unlocking pressure?
How is the ecosystem? Is TVL (Total Value Locked) continuously growing? Are there real users participating?
For example, Ethereum; you need to know that it is the 'infrastructure' for smart contracts, and after the merger, the deflationary mechanism takes effect, becoming more valuable as the Layer 2 ecosystem thrives. Those coins that don’t even have clear white papers or have vague team backgrounds should not be touched, no matter how cheap they are — 90% of new projects in the crypto world are essentially 'air'.
Understanding the project is difficult, but not impossible. Excellent projects are like excellent people; they have a clear 'growth logic'. As long as you are willing to spend time researching, you will always find clues.
Second principle: Reverse operation; pick up chips when others are cursing.
The money-making opportunities in the crypto world are always hidden in the extremes of fear and greed.
In 2022, when LUNA collapsed, the entire market was in despair, and BTC dropped to $16,000. Those who dared to increase their positions then have at least doubled their investments now; at the peak of the 2021 bull market, everyone shouted 'BTC will reach $100,000', and those who exited at that time avoided the subsequent halving.
The core of reverse thinking is: dare to buy when it’s deeply undervalued, and dare to sell when it’s crazily inflated.
Short-term operations should be the same: if a coin continuously plummets and the community is full of complaints, if a volume rebound occurs, that's the opportunity; conversely, if it suddenly skyrockets and Twitter is full of 'wealth myths', quickly take profits in batches — don’t wait until the tide goes out to find out you’re swimming naked.
Third principle: Be bold in investing heavily when you are sure, otherwise don't act.
For small funds to grow quickly, it relies on 'placing heavy bets at critical moments'. Buying $100 today gets you a cup of milk tea profit, losing $50 tomorrow means having to eat noodles, and after a year, the transaction fees won't even be covered.
But the premise for heavy investment is 'understanding + reverse thinking'. Before the DeFi explosion in 2020, I studied Compound for half a month, confirming it was the leader in the lending track, and invested heavily when it dropped to $50 (60% of total funds at the time); it later rose to over $300, multiplying six times.
Remember: Heavy investment is not gambling; it is a certainty bet based on in-depth research. If you are unsure about the project, it is better to invest lightly and experiment than to blindly go all in.
Fourth principle: Patience is the most valuable quality in the crypto world.
I have seen too many people buy a coin and sell in a panic after a 5% rise, and cut losses after a 10% drop, only to watch it double later. The real money-making opportunities are always 'endured' out.
Before buying in, be patient and wait for a good price: BTC hovered between $26,000-$29,000 for 5 months, during which there were countless opportunities for low buys; those who rushed to chase highs ended up getting stuck.
After buying in, be even more patient with your holdings: ETH rose from $2,000 to $4,000, pulling back 3 times in between, and each time people were scared and fled. Only those who could endure their patience could ride the main wave.
My experience is: as long as the project logic hasn't changed and the trend hasn't broken, endure the volatility. The short-term noise in the crypto world is too much; patience can help you filter out 90% of distractions.
Livermore's cryptocurrency buying method (proven effective)
First, buy 20% of your position to test the waters. For example, if you have $1,000, first buy $200 worth of BTC.
If it drops 10% (to $180), cut your losses decisively — at most, you lose $20, which won't hurt too much.
If it rises 10% (to $220), then increase your position by 20% (buy another $200); if it rises another 10%, add another 20%... Finally, add 40% one last time to let the profits roll in.
As long as it doesn't drop below the 10% stop-loss line, hold onto it; once it drops below, liquidate all positions.
The core of this method is 'low trial and error cost, high profit potential', especially suitable for the high volatility environment of the crypto world.
Why do you always lose? 90% of people fall into this trap.
Not understanding the big environment is the root cause of retail investors' losses in the crypto world.
At the end of a bear market, funds will flow to severely undervalued mainstream coins (like BTC, ETH). Those that have dropped 90% but still have active teams will rebound the strongest.
At the beginning of a bull market, focus on those leading tracks that 'start before the market does' (like the Solana ecosystem in 2021), as they often become the main characters of this market cycle.
At the peak of a bull market, do not touch those 'suddenly skyrocketing tokens'; funds are quietly withdrawing, and the ones buying in are greedy retail investors.
Lastly, I want to say: the crypto world is not a casino; it is a battlefield for 'cognitive realization'. Your understanding of the project, grasp of market sentiment, and control over your own greed and fear will eventually translate into numbers in your account.
Follow [Whale Tracking Coins]#币安HODLer空投ERA #山寨季何时到来？
