The cryptocurrency space is a virtual financial circle involving cryptocurrencies and blockchain technology. The cryptocurrency space refers to all kinds of people, projects, and communities related to cryptocurrencies. The origin of this circle can be traced back to 2009 when Bitcoin was created as the first application of blockchain technology.
If you are also involved in the cryptocurrency space, I sincerely hope this article can help you. As someone with decent summarizing skills and expression, I believe some of my thoughts might be of assistance to you. Alright, without further ado, let's get straight to the point~
1. Be sure to keep records
Make sure to record your feelings and operational details at that time, because words do not lie. Only through real records and careful summaries can you find direction for correct decisions next time. To be honest, experiencing and witnessing such historical moments is a rare growth opportunity. In other words, this experience is the necessary path to becoming a mature investor. As the saying goes, only through personal experience can one have a broader perspective. In the investment process, 'seeing is believing' is an illusion, but it is also the only magical power that allows people to truly believe and accumulate knowledge and experience. If you do not take full advantage of and absorb this historically significant experience, it would be a waste of this valuable opportunity.
2. Never go all in
Whether in the cryptocurrency space or the stock market, truly mature investors will not choose to go all in all the time.
Because those extreme situations caused by black swan events—are bound to happen, especially in a market as volatile as the cryptocurrency space. This may seem like a simple principle, but it is very difficult to execute in practice. Of course, you might have various reasons to go all in, such as having little principal or believing that the asset you just bought is about to rise. Regardless, you will always be reluctant to let your money sit idle, and you will feel the impulse to invest it at any moment. I completely understand this feeling. But reality always mercilessly teaches us lessons. Therefore, I decided to set aside at least 15% of my position after the next round of increases. I initially wanted to leave more, but I know I might be reluctant, so I will take it slow; after all, cultivation is not achieved overnight. This reserved fund will only be invested when the market experiences a drop of about 30%.
3. A sharp decline is the best test of human nature
A sharp decline is both a mirror reflecting human nature and a touchstone of human character. Just like most people can share in happiness but find it hard to share in suffering, each sharp decline not only causes coin prices to plummet but also reveals the truth of human nature. In the past, I helped a few strangers make several times their money; some were grateful and insisted on transferring coins to thank me, while others felt smart when making money but shifted the blame to me when they lost. This recent sharp decline particularly highlighted these differences. Of course, I'm not foolish; after this, I am clear about how to treat these people.
4. Always buy only those coins that allow you to hold them with peace of mind
To be honest, the reason I wasn't particularly panicked this time is that over the years, whether buying coins or stocks, I only buy those assets that I believe would be completely fine even if held for over 5 years. This has become my amulet for sleeping peacefully. Of course, I must admit that the various fluctuations in the recent market made me give in and buy some small coins, but because the amounts were small, I could accept even if they went to zero, so I was not too panicked. I hope everyone can remember and follow this principle; it will help you avoid many troubles and significantly improve your quality of life. Only by holding truly quality assets can you achieve real peace of mind.
5. The eternal bull market is in the heart
Another reason I am not panicked is that I already have the confidence of $100,000, so I am not afraid at all. I won't elaborate on this. In this industry, where so many elites and capital have been continuously investing for over ten years, changing the world is the inevitable outcome. So, there is no need to scare yourself, worrying about Bitcoin going to zero. If it were to go to zero, it would have done so long ago. Oh, by the way, if you are familiar with history, you will understand a basic truth: throughout history, reformers have often been the targets of criticism. That is why Bitcoin has been sentenced to 'death' multiple times. But interestingly, Bitcoin is still surviving fiercely, and it can even be said to be thriving. This alone proves its strength. Neither the world's strongest governments nor the richest people can truly take it down. Doesn't that echo Nietzsche's famous saying: 'What does not kill me, makes me stronger.'
6. After every sharp decline, there will be a sharp rise
Looking back at Bitcoin's history, every time there is a significant drop of around 40%, it is almost always followed by a strong rebound, typically between 20% and 30%, often occurring in the short term (like the next day or the day after). So do not be afraid; bravely enter the market when others are panicking, believe in historical patterns, and do not be intimidated by the current sharp decline.
7. Try to stay away from contracts and leverage
On the day of May 19, 600,000 people were liquidated, and I was one of them. Data shows that $6 billion was liquidated in just one hour, totaling $18.3 billion in 24 hours. This clearly demonstrates that leverage and contracts during a sharp decline are indeed a 'meat grinder.' If you use high leverage, no matter how much money you have, it will never be enough to cover your losses. After this, I set a rule: my leverage and contract amounts will never exceed 3% of my total principal. Additionally, the money earned from contracts is usually based on luck; you must enjoy it in time, as today it's your money, but it may very well belong to others tomorrow.
8. Do not let news sway investment decisions
When the market is doing well, whether in your thinking or in media reports, there seems to be a flood of positive news; but during sharp declines, all sorts of sensational news emerge, often appearing in a 'adding insult to injury' manner, leaving you with no breathing space until you have thrown away your last chips. Therefore, during extreme market panic, do not look at negative news; it is of no help. Remember the fourth principle we mentioned earlier—what we buy are always things we can hold for at least 5 years, so do not be led by others or bad media. Also, during a sharp decline, do not look at the panic-stricken messages in the chat groups; those small retail investors are already terrified and just want to drag you into panic with them; block them!
9. Believe in the power of cycles
The investment market is friendly to a portion of people because these individuals deeply understand the power of cycles. As long as humanity continues to develop, a bull market will inevitably follow a bear market. Even without mentioning the cryptocurrency space, looking back at modern human history, has any financial crisis ever truly led to our complete collapse? Don't mention financial crises; even disasters like world wars that destroyed physical entities led to rapid recovery for people worldwide. Therefore, in a pro-cyclical manner, one must have confidence. Surrender yourself to historical trends, patiently wait for the right time to come, and let the bullets fly a little longer~
10. Always respect the market and dare to pave new paths
Market volatility is always more intense than you can imagine, whether it's rising or falling. For example, when BTC surged to 10665, how many people were willing to sell? And how many dared to enter? This is one of the core reasons for investment success: walking the path others are afraid to take can yield extraordinary returns! Though this principle is basic, in practice, it is as tough as a personal odyssey. In a bull market, everyone thinks trading cryptocurrencies is easy; just buy a coin and it can multiply several times, even dozens of times. But when the market skyrockets, people may truly understand the meaning of 'holding coins like guarding a widow.' If you are still feeling lost and don't know how to approach this market, follow me!
