Five years ago, a friend of mine decided to invest the 120,000 yuan he originally intended to use to buy a car entirely in Bitcoin, when the price was around 18,000 yuan.
Two years later, this investment soared to nearly 4 million yuan. He opened a bottle of Romanee-Conti at the Bund in Shanghai, feeling like he was riding the wave of the times.
However, the cold winter of 2018 hit suddenly, and Bitcoin plummeted from its peak to below 30,000 yuan; his account shrank to less than 300,000 yuan. That bottle of red wine still stood in the wine cabinet, while he had already moved out of his apartment and into a shared room.
This experience led him to summarize four iron rules learned from exchanging real money:
First, never invest in projects beyond your understanding. He once lost 500,000 yuan overnight chasing the concept of “mining coins,” only to discover later that the project hadn’t even had its basic code audited. Now he insists on “not investing in what you don’t understand,” and he reviews the white papers and audit reports for every investment.
Second, asset allocation is the foundation of survival. Now he divides his funds into four parts: 50% allocated to Bitcoin and Ethereum, 20% invested in cross-chain and other infrastructure, 20% for arbitrage strategies, and the remaining 10% occasionally participates in high-risk opportunities. This structure allowed him to limit his drawdown to single digits during the bear market of 2022.
Third, completely eliminate reliance on leverage. During the drop on “3·12” in 2020, he lost 800,000 yuan overnight due to 20x leverage. The next day, he uninstalled all contract software and hasn’t touched it since.
Fourth, information filtering is more important than information acquisition.
Before the collapse of LUNA in 2022, he noticed unusual staking rates through on-chain data and liquidated his holdings in advance to avoid disaster. In contrast, he once blindly trusted a recommendation from a “big shot” for a certain altcoin, which ultimately went to zero.
Now, he no longer seeks hundredfold returns but instead steadily achieves around 15% annualized returns through DeFi staking and cyclical rotation. He opened an inn in Yunnan, managing the business during the day and studying on-chain data at night.
He said: “There are no myths in the crypto circle, only rule-based players who survive. True wealth is not the numbers on the balance sheet but the calmness earned through time.”
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