Over the years, I've learned 18 lessons in the crypto market

Author | Route 2 FI

Compilation|Vernacular blockchainNo

matter whether you are in the crypto market or not, as long as you pay a little attention, you will always seem to be tickled by those hundred-fold or thousand-fold news of getting rich, and you can't help but substitute yourself into it, and then go down to the table.

However, only after really participating in it, will you find that behind the few lucky people who get rich, the vast majority of them are just unknown or even lost cannon fodder.

years of working in the crypto market, I have learned these 18 lessons:

01. Don't assume that anyone will think about youEven

if you feel like you are part of the crypto Twitter community and feel like you belong to some big family, in reality, in this market, you are alone. The cryptocurrency market is a "player-versus-player" arena where everyone pursues their own interests.

No one will really think about you, and all decisions and actions revolve around self-interest. Therefore, you need to be vigilant and rely on your own judgment instead of counting on the kindness of others.

02. The information asymmetry on Twitter is extremely

highOn social media platforms like Twitter, the phenomenon of information asymmetry is very serious. Some influencers may have more inside information or market dynamics, while the average investor is often at a disadvantage. To make informed investment decisions in the cryptocurrency market, you need to be clear about who is the truly valuable source of information.

Follow the right people and you may get a huge "alpha", blindly follow the wrong people and you may lose all your money. Learning to discern the reliability of sources and motivations is the key to successful investing.

03. Trust your own judgment

When market sentiment fluctuates, the advice of others is often unreliable.

• When the market is going up, you ask someone what to buy now, and they might say, "Buy when the market is high?" Are you stupid?
• When the market goes down, you ask people what to buy now, and they say, "It's all over, it's a fool to buy now." "

These feedbacks tend to reflect the extremes of market sentiment rather than objective recommendations. Therefore, learn to trust your own analysis and judgment and not be swayed by the emotional statements of others.

04. Stay away from the echo chamber

On Twitter, it's easy to get stuck in the "echo chamber", that is, only hear voices that share your own opinions. Instead of using social media to seek confirmation bias, use it to test and challenge your investment views.

For example, if you're considering investing in a popular coin (like "HYPE"), look for opposition as well as support for it. Perhaps you've overlooked some key risks or issues. Keep an open mind to make more informed decisions.

05. Spend time on valuable thingsInstead

arguing with anonymous people online, it is better to spend time on more productive things, such as:

• Read the project white paper to gain an in-depth understanding of the technical and business logic of the project;
• Experiment with relevant applications on-chain to experience their capabilities and potential firsthand;
• Interact with the community on Telegram or Discord, ask questions, and get first-hand information;
• Record your investment ideas and write down your investment logic.

Thinking on paper can help you sort out your thoughts more clearly. Writing down your investment arguments before investing allows you to evaluate decisions more rationally and avoid emotional manipulation.

06. Don't waver in your belief because of other people's earningsSeeing

others making a lot of money in a short period of time may make you fearful, doubtful, or afraid of missing out on your long-term positions. But you have to keep in mind that the investment logic for long-term positions is measured in years, not weeks or days.

If your investment argument is still strong, hold on to it; But if the fundamentals of the market or project have changed, sell decisively. Never "fall in love with your position", it's important to be flexible and rational.

07. Emotion management in tradingIn

trading, emotions are often the biggest enemy. Here are some suggestions:

• If you're overly excited about a position, consider selling;
• If the price of an asset suddenly skyrockets, sell decisively.

The market can't go up forever, and the key to long-term survival is to learn to lock in profits. Greed can make you miss out on the best time to exit.

08. Understand the source of income of decentralized finance (DeFi)

In a DeFi platform, if you can't clearly explain the source of income in two sentences, then you are likely to be the "source" of income. In other words, you may be providing liquidity or taking risks to others without you even realizing it. Before investing in a DeFi project, it's important to understand its economic model and risk points.

09. Narrative determines everythingIn

the cryptocurrency market, narrative is the core force that drives prices. The stories that market participants co-construct can greatly impact asset values. For example: [Dogecoin] had a total market cap of nearly $100 billion at one point, which was entirely narrative-driven.

It reminds me of a quote: "Do you want to make money, or do you want to prove yourself right?" "In the market, following a narrative is often more rewarding than clinging to the "right".

10. Don't chase highWhen

you find a new project and think, "Wow, that's a great idea," but you don't invest in it for weeks, don't chase it when its price suddenly skyrockets. Your best investment opportunity was missed a few weeks ago. Rush in now and most likely buy at the local highs. Learn to accept missed opportunities and wait patiently for the next one.

11. Emotions are temporaryWhen

you start making money, you may feel extremely excited, the feeling is addictive, and you will want to recreate the pleasure over and over again. However, overtrading or frequent rotation of positions often stems from chasing this feeling rather than rational investment decisions. Learn to control your emotions and stay calm to avoid unnecessary losses.

12. Understand that market cycles and sector rotation

In a bull market, not all assets will rise at the same time. Usually, there will be different phases in the market, and certain sectors (such as DeFi, NFT, Layer 2, etc.) will take turns performing. Keep an eye on emerging narratives and trends, and plan ahead of time, rather than chasing the sectors that have already started. Plan your investment strategy well to take advantage of market rotations.

13. The cost of making mistakes when you are young is much

mistakes in your 20s. The lesson of losing $1,000 is far more bearable than the lesson of losing $100,000. The first time I tried leveraged trading, I lost a few thousand dollars in a matter of minutes, but this failure taught me valuable lessons. Failure is part of growth, but make sure the cost of failure is within what you can afford.

14. Why most people can't make money in the crypto marketOrdinary

investors are often at a disadvantage in the cryptocurrency market, for the following reasons:

• YouTubers or influencers tweet about a certain project, and the price starts to rise;
• The token entered the top 100 of CoinGecko and attracted more attention;
• KOLs, VCs, or early investors start selling when it rises;
• The project became "widely known" and ordinary investors began to buy;
• Retail buying pushes prices higher, but the gains are limited;
• KOLs, VCs, etc. sell all positions;
• The price of the token plummets (usually while you sleep) and you are forced to cut your flesh.

Understanding this pattern can help you avoid becoming a "pick-up man".

15. Give yourself time

We all want to get rich quick, but success in the cryptocurrency market takes time. Slow and steady is the key to winning the game. Of Warren Buffett's $84.5 billion fortune, $81.5 billion, or more than 96 percent, was accumulated after he turned 65. This reminds us that patience and long-term persistence are the keys to wealth building.

16, what you want is not retirement, but freedomMany

people think that retirement is the goal, and imagine themselves lying on the beach in the Caribbean Sea for vacation. But retirement can be boring after a week. The real goal is freedom – waking up every day to do what you want to do, create value with interesting people, and have enough time to spend with family and friends. The cryptocurrency market may provide you with financial freedom, but don't forget to pursue more meaningful life goals.

17. The Cost of Doing Crypto Full-TimeIf

you want to quit your stable 9-to-5 job and plunge into the cryptocurrency market full-time, ask yourself if you're ready to be online 10 to 16 hours a day, 7 days a week, for years. Even then, there is no guarantee of success. Diving full-time in the crypto market requires extreme self-discipline, patience, and mental toughness.

18. Reflections After

SuccessWhen you "succeed" in the cryptocurrency market, you may find that this is not what you originally wanted. You have the money, but you're still the same you. Money doesn't solve everything. If your goal is only money, you may feel empty or even depressed after success. Therefore, setting goals that are more important than money, such as personal growth, family happiness, or social contributions, can make your success more meaningful.