"Be fearful when others are greedy, and greedy when others are fearful." This is a famous saying by Buffett and the survival rule for investing in the crypto space. However, very few can achieve this because it goes against human nature; when prices rise, people greedily want to earn more; when prices fall, people fearfully want to sell quickly. Over the past three years, the reason I have survived and made money in the crypto space is fundamentally due to a set of 'simple methods' that help me control my greed and fear, maintaining rational judgment at all times. Although these 'simple methods' seem straightforward, they help me combat human weaknesses and are key to navigating bull and bear markets.
The 'clumsy method' to restrain greed: set a fixed profit-taking ratio, sell when the time comes, and never be greedy. Greed is the most common cause of death for retail investors in the crypto space. Many people think 'I'll sell when it rises a bit more' when their assets are increasing, only to miss the best profit-taking opportunity. I set strict profit-taking rules for myself from the start: for mainstream assets (like Bitcoin and Ethereum), sell 20% when it rises by 50%, sell 30% when it rises by 100%, and hold the remaining 50% for the long term; for second-tier assets, sell 50% when it rises by 100%, sell 30% when it rises by 200%, and decide whether to sell the remaining 20% based on project developments. In 2021, Bitcoin rose from $30,000 to $60,000, an increase of 100%. I sold 30% of my Bitcoin according to the rules and secured my profits. Although Bitcoin later rose to $69,000, I have no regrets because I know that no one can accurately determine the peak. As long as I reach my profit-taking target, I should sell decisively. In contrast, many people around me thought 'it can still rise' when Bitcoin reached $60,000 and did not sell, resulting in losses after Bitcoin plummeted.
The 'clumsy method' to restrain fear: formulate a regular investment plan in advance, insist on buying during downturns, and never sell at a loss. Fear is another deadly weakness for retail investors in the crypto space. When asset prices fall, people fear 'further declines', leading to panic selling and ultimately selling at the lowest point. To combat fear, I established a strict regular investment plan that remains unchanged regardless of market fluctuations. In 2022, Bitcoin fell from $30,000 to $15,000, a 50% decline. Many people around me panicked and sold at a loss, while I continued to invest according to my plan every month. Once, right after I made an investment, Bitcoin dropped another 10%, and people around me mocked me for 'catching falling knives', but I remained steadfast because I knew that the core of regular investment is to accumulate more shares at lower prices. By the time Bitcoin rebounded to $30,000 in 2023, my previously invested shares had already gained 100%, while those who panicked and sold had long missed the opportunity to recover and profit.
In addition to these two 'clumsy methods', I also use 'physical isolation' to combat human weaknesses, storing long-term held assets in a cold wallet instead of on an exchange. A cold wallet is a wallet that is not connected to the internet, which is extremely secure, and the operations are relatively cumbersome, meaning I won't easily sell due to short-term price fluctuations. In 2021, Ethereum surged dramatically, and I wanted to sell the Ethereum in my cold wallet several times, but when I thought about connecting the cold wallet to the computer, entering the password, confirming the transaction, and other cumbersome operations, I gave up. Later it proved that my decision was correct, as Ethereum increased significantly afterwards. Those who stored assets on exchanges often make wrong decisions in moments of emotional impulse due to the convenience of 'one-click sell'. Although physical isolation is 'clumsy', it effectively restrains short-term impulses and helps maintain long-term holding.
I have also developed a habit: whenever the market experiences extreme emotions, I review the history of the crypto space. The bull and bear cycles in the crypto space are very obvious; from 2011 to 2023, there have been four rounds of bull and bear markets. Each bull market causes asset prices to soar, and each bear market causes asset prices to plummet, but ultimately, the prices of quality assets reach new highs. When I feel greedy due to rising prices, I recall the crash after the 2017 Bitcoin bull market, reminding myself that 'the bull market will always end; don't be greedy'; when I feel fearful due to falling prices, I recall the rebound after the 2018 bear market, reminding myself that 'the bear market will always pass; don't panic'. Although history does not simply repeat itself, it often bears a striking resemblance, and reviewing history helps me remain calm amid extreme emotions and make rational decisions.
Investing in the crypto space is essentially a game against oneself; the opponent is not the market or the whales, but one's own greed and fear. Human weaknesses are difficult to eliminate completely, but they can be restrained through 'clumsy methods'. My experience proves that as long as you can set strict rules and persist in executing them with 'clumsy methods', you can combat human weaknesses and make money during the alternating bull and bear cycles in the crypto space. Remember, the biggest enemy of investment is not the market, but yourself@Square-Creator-01cb5c68809bc #加密市场反弹 $BTC
