Overnight, Bitcoin dropped 5%. Shorts and longs were fighting back and forth, and the ups and downs of the K-line were like a cat toy, directing traders to jump left and right, and the contract market was in chaos.

The market is eerily quiet. I see a lot of pessimism and despair on social media, which is a bit confusing. Normally, such a market should be the most comfortable.

Those who were fully invested last year still have huge profit margins, and the boring market can free up more time to enjoy entertainment; friends who are preparing to enter the market this year do not need to spend too much energy, they only need to add a little position during each crash, and do the rest step by step.

I feel like everyone is scratching their heads, mainly because more than half of this year has passed, and there is no sign of the copycat season. Many people don’t realize that blockchain is not about making money for them, but about finding the thrill of adrenaline in the boiling market.

Another reason is that the amount of capital entering the market is decreasing. This decrease in capital is partly due to the decrease in new retail investors, and partly because too much money is locked up in altcoins. The latter part is money that is not mentally prepared, so I can’t sleep well every day, and I don’t want to make money anymore, I just want to know when I can get out of the trap.

I thought about it. Recently, people have been talking about Bitcoin and Ethereum. Although they say yes, yes, yes, yes, yes, they don’t care in their hearts. They still think of speculating first and buying when they have more money. It’s not so easy to turn back.

To put it bluntly, when accumulating initial capital, especially when one has no background, there are indeed some things that are not presentable, and some risks need to be taken. Another word for this is "speculation".

Speculation is not a simple matter. Many friends who buy altcoins think they are "speculating", but they really overestimate themselves. Real speculation means that one's knowledge of a certain field is higher than that of most people, and that one has discovered the bugs and defects of the market, and seizes this opportunity at a certain risk to obtain excess returns.

Think about it yourself. Do you really understand the rules of the game when you buy fake products every day? Where do hundreds of times of profits come from? How to judge? You don’t know anything. Just because a cool guy in a group or a KOL said something, you rush in with money.

Today I saw a tweet on X. VT, the scammer who used to call on everyone to crowdfund and defrauded a huge amount of SOL, recently came out and said he would launch a new project, and some people were fooled, so I want to talk about the issue of "altcoins" in detail.

First of all, all tokens except Bitcoin and Ethereum are called altcoins. To date, there are indeed many altcoins that have achieved huge gains other than BTC and ETH, but what everyone needs to understand is how this increase of hundreds or thousands of times was achieved? And can you really get it?

Let me tell you about my past experience. Before DeFi became popular, I had already asserted that it would definitely be a huge engine for the bull market. At that time, I mentioned many related and unrelated projects, including Theta, Lend (AAVE), SNX, and later Woo. The growth rates of these projects ranged from dozens to hundreds of times.

I bought it myself, so why didn’t I get rich? Let’s talk about it.

1. The principal that can most likely gain a hundredfold increase is very small. This is due to objective factors. Because the project itself does not allow it.

Projects with a value of more than 100 times the market value are usually worth millions to hundreds of millions, or tens of millions to billions. The market value of projects at this time is most likely due to the inflated market value caused by low circulation.

For example, a project with a value of 1 million yuan may only have 10% of its shares in circulation, so you only need to invest 20,000 yuan to maintain the price of the currency. At this time, if you invest more than 20% of the transaction volume, the price of the currency may go up to the sky, and there is no more room for retail investors.

Most of the people who got hundreds of times the amount may have just a few hundred U (hundreds of U), which is pretty good. This is a typical case of pretending to be a big shot to make a small amount of money.

2. Even if you buy a project with a hundred-fold return at a low price with a large position, it is still difficult to hold on to it.

Even if you find a project worth tens of millions to billions of dollars, if you buy too much and don't have enough confidence in the project, let alone a hundred times, you may start to reduce your holdings when it rises by 50%, and then sell them while the price continues to rise. If you are lucky, you can get hundreds of times the profit from the remaining base position, but it is actually not much.

Because gambling makes people panic, they are willing to lose 99% of their money, but they are not prepared to lose 99%. Therefore, large positions cannot gain any gains at all, and only the remaining scraps that can be accepted to return to zero can get hundreds of times the day.

3. Even if a large position has gained a hundred-fold increase, the investor will not sell it and will only watch the price fall in the end.

Another question is, will you really sell it if it rises 100 times? There is a real case for this. Some VC friends bought Sol, Luna and BNB because they had enough information in advance, and achieved the leap to A9 in the last bull market, and then happily immigrated to Singapore...

He did not sell it. The 100-fold increase gave him enough confidence. However, after the bull market, the average fell by 90%. 21 years later, the cost of immigrating to Singapore was extremely high. The market was bleak and he was forced to sell his coins to make a living. He was double-killed by Davis...

If you want to earn 100 times, you must have faith. When you have enough faith, it is highly likely that you will not get out after it rises 100 times. This is the source of profit and loss, so I always emphasize that you must choose the project with the most lasting market growth and can cross cycles, otherwise it will all be a mirage.

4. It is difficult to get hundreds of times even with a small capital, because it is usually troublesome to open a position at that time.

Most people who participate in altcoins do not realize it until a certain token has increased by thousands or tens of thousands of times. They either rush to buy the "leading" ones that have already completed the increase, or are fooled into investing in the "next XX".

Success cannot be replicated. ORDI can rise so much, but ORDD and ORDE cannot; PEPE can rise, but PEPA may not. The growth of copycats comes from the consensus of retail investors, and retail investors have limited strength and cannot support more projects.

Therefore, when the market is hot, it is likely that you will lose money. Even if it rises, it is only 50%, which is useless. If you want to make 1 million with altcoins, early users take 10,000 and wait for 100 times, mid-term users take 200,000 and wait for 5 times, and late users take 500,000 and return to zero.

The risks are getting higher and the returns are getting lower.

But is it easy to get involved in a project early? It’s not easy. Luck and execution are very important. Let’s not talk about the distant past, just take ORDI as an example.

I remember clearly that I paid attention to the Ordinals protocol on March 9, when I typed a lot of sat domain names on Unisat. I gave up when I found that there was no standardization and it was difficult to make money.

God knows BRC20 was released on March 8th. A small Twitter user tweeted about it, but I didn’t pay any attention to it. At the same time, arb and OP airdrops arrived one after another, and my attention was diverted. It was not until May that I started to pay attention to projects such as ordi and pepe again.

At that time, the price had gone up like crazy, so I only bought 1000U of pepe and didn't buy ORDI. Because it was too troublesome. I had to go to unisat to open a transaction, and I had to pay a high minting fee before I could trade. After that, the inscription package cost 1000U, and I couldn't bear to buy something that I couldn't even understand.

I learned a lesson when I was playing with inscriptions. No matter how difficult or troublesome it is, I have to do it as soon as possible. I have to open a node and write code, but it doesn’t cost much. The gas fee for playing an inscription is only a little bit. I can only play a few hundred cards all night, less than a few dozen U. I can only say that I made hundreds of times the profit, which is not satisfactory.

Friends who are going to buy BTC, think about whether you are diligent enough and can learn it. No need to guess, the first thing they do is to ask if it is listed on BN or OKX, and they want to buy it, but they will back off when they are told that they need to operate on the chain.

Just tell me, if you have no information, no money and are lazy, can you seize the opportunity given to you? You can only become a market liquidity provider and a leek.

5. How do altcoins get results?

Therefore, if you really want to get the benefits of altcoins, there are probably only two opportunities:

-High returns from joining early at ultra-low cost.

Except for Bitcoin, all blockchains are not yet sufficient to show real benefits of sustained growth, but the concept of web3 is very imaginative, and the infrastructure is not enough, so new things will come out in each cycle. These new things will definitely make money in the early stage.

If you want to make this money, it depends on your ability to take action and screen information.

-Moderate returns in the main bull market uptrend.

The main uptrend of the bull market is when retail investors are most active, and it is also the time when Bitcoin accounts for the lowest proportion of the crypto market capitalization. Often at this time, altcoins will absorb a large amount of liquidity and achieve extremely high gains.

If you want to make this money, you must put in funds that you can afford to lose. Otherwise, if it rises by 50% and you sell it, it rises again, and you buy it again after it rises, you will be stuck after the bull market.

Theoretically, there is actually a third option, which is to build a position in altcoins in a desperate market. But in fact, this is impossible. Because you can't find the bottom. If it falls by 80%, it can fall another 80%, and it may not rise back.

At that time, everyone believed in only Bitcoin, and they were not afraid of falling. At this point, you can realize why 99% of people who get big results rely on BTC and ETH, right?

Because the most profitable is the profit from the most desperate bottom area to the top of the bull market. But the process of desperate bottoming out still has a huge drop. Everyone believes that BTC can rise, but everyone is worried about the altcoin falling to zero. You dare not hold a large position.

That’s all I have to say. There is a methodology for everything. You need to study and research. Speculation in small coins is non-standard. Why do we emphasize investment and buying Bitcoin? Although it may seem slow, it is the only system that can be learned and the only way to get results.

Don't be too ambitious. Know yourself, do what you can, know yourself, learn and improve your cognition.

Only when you have paid the "tuition" and gained insight into the essence of the matter can you start making money. This is also a difficult thing - because it requires you to have some bullets left for investment after paying the tuition.