Ten years of blood and tears have forged three iron laws, which I now share with you.
In the summer of 2014, with the 3000 yuan salary I had just saved up, I stumbled into the world of cryptocurrency under the persuasion of a friend who called himself a 'Bitcoin prophet.' At that time, I couldn't even pronounce the three words 'blockchain' smoothly, and I never would have thought that the next ten years would be as thrilling as a roller coaster.
Three years later, during the frenzied bull market at the end of 2017, my account assets once broke through 3 million. From 3000 to 3 million, I heard too many compliments along the way, almost really thinking I had the ability to turn stone into gold. But reality quickly gave me a heavy blow, and the market taught me to recognize myself anew.
When the bear market arrived and my assets shrank to less than 300,000, I truly began to reflect on the gains and losses of the past decade. Today, I want to share the lessons learned through hard-earned money and discuss the real logic behind crypto investment.
Recognizing the truth: the era's dividends are not personal abilities.
In a bull market, everyone is a 'stock god'. I clearly remember that in 2017, a large number of 'investment experts' suddenly emerged around me, flaunting screenshots of returns in the hundreds and teaching everywhere, and I was one of them.
But when the bubble bursts, that's when you find out who is swimming naked. I once attributed early investment success to my unique vision, only to later realize that I was simply riding the wave of cryptocurrency's popularity dividend. Just like the internet bubble of the 1990s, early participants were easily mistaken for geniuses.
The real transformation occurred in 2018. When Bitcoin plummeted from nearly $20,000, I still firmly believed in my 'judgment,' only to watch my assets shrink. That was when I realized: the market doesn't care how good you feel about yourself; it only teaches you a lesson at the right time.
Crypto analyst Miles Deutscher has made a sharp summary: 'In a bull market, speculation and hype are the strongest driving forces of price. Focus less on fundamentals and more on market psychology.'
Position management: survival is more important than making money.
After experiencing several bull-bear transitions, I gradually formed my own position management principles.
The first rule is to never bet all my fortune at once. I adopt a 'test-then-add' strategy: I first invest a small portion of funds to test the waters, and after the trend is clear, I gradually increase my holdings. It sounds simple, but when FOMO (fear of missing out) spreads, it requires immense self-control.
My asset allocation follows the '70-20-10' principle: 70% of funds are allocated to core assets like Bitcoin and Ethereum; 20% is invested in mid-tier projects with potential; the remaining 10% goes into high-risk, high-reward innovative projects. This ratio does not change with market sentiment; losing one's composure is equivalent to suicide.
In 2018, I witnessed too many tragedies. Many investors were attracted by the wealth stories of altcoins and bet their entire fortune on unreliable projects, resulting in these tokens nearly reaching zero as the market cooled. As a seasoned trader once said: 'Surviving is victory. In cryptocurrency, persistence is the ultimate winning formula.'
Overcoming the inner demons: the self-cultivation of a trader.
Emotional management is the most underestimated aspect of cryptocurrency investment. I have established a few iron rules for myself:
When profits double, immediately withdraw the principal and let the profits continue to run; if the price drops 20% from the peak, unconditionally reduce holdings by half; if losses reach 10% after buying, decisively cut losses and exit.
These rules seem simple, but executing them is exceptionally difficult. Greed and fear often pop up to disrupt judgment. For a while, I even wrote the trading rules on paper and stuck them next to my computer, reading them aloud before each operation.
The most profound lesson came from 2021. At that time, I made substantial gains on Dogecoin, but due to greed, I failed to take profits in time, ultimately watching my profits evaporate. That psychological gap is more painful than losing money from the outset.
An experienced player in the crypto world, Lin Jian, who has ten years of experience, also shared similar insights: 'By the fourth quarter of 2021, the overall market heat began to decline. At that time, I felt that the price of cryptocurrencies had deviated significantly from their actual value.' Learning to withdraw in time is an important hallmark of a mature investor.
My current choice: reconcile with the market.
Now, I have shifted most of my assets to a stable allocation, leaving a small portion to continue participating in this unpredictable market. This is not retreating but reconciling with the market.
The cryptocurrency market is still young and highly volatile. The white paper released by Zhikong in 2018 pointed out: 'The 'virtual currency' market inherits various risks from traditional financial markets, but differs in specific degrees.' This means ordinary investors need to be more cautious.
Blockchain technology expert Wang Feifei's perspective may be more objective: 'Blockchain is a technology full of imagination, but it has been hindered by 'coin speculation'.' This reminds us that what truly matters is the technology behind it, not short-term price fluctuations.
Ten years have passed, and I have transformed from a novice with dreams of getting rich to a cautious long-term investor. The market never cares who I am; it simply keeps reminding me: stay humble, follow the discipline, and surviving is more important than anything.
Perhaps this is the ultimate lesson the crypto market teaches us: it's ultimately not about conquering the market, but about how to conquer ourselves.
In this zero-sum battlefield, knowing how to make trade-offs is the key to long-term survival. Now, I have learned to find a balance between madness and rationality. I hope my experiences can help you avoid some detours.
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