#深度创作营

These are the pitfalls I've encountered over the years in the crypto world

In the crypto space, the longest journey is following the套路 of 🐶 manipulation

Although I haven't been managing exchange accounts for long, Little Fortune has been a seasoned veteran with thirteen years in the scene. Looking back, wealth without freedom, lessons learned the hard way. Reflecting on these years, it's a blood and tears story of踩坑. I'll share a few major pitfalls in hopes of helping everyone avoid detours. These are purely personal experiences; if there's any similarity, feel free to reach out for a heartfelt cry.

First Pitfall: Believing Insider Information

Before entering the scene, I already had years of investment experience, understanding technical indicators, news hype, fundamental analysis, and so on. So when I first entered the crypto world, I was doing pretty well until the summer of 2014, when I encountered my "first ordeal" in crypto. I remember it was just before the World Cup that year. Bitcoin was in a rebound after dropping below 8000 points, a small bull market. Having traded for a while, I met a "big brother" from Beijing. As I got more familiar with him, he started giving me some buy and sell tips. The levels could only be described as "exactly the same"—let's just say precise to two decimal places. I followed his advice a few times and was stunned. Later, he told me he got these levels from a "big shot" group. From then on, I regarded that group as "heavenly," and I followed every trade. Not long after, the "big brother" said they had a new message: the main force would push the market up on the night of the World Cup opening, and Bitcoin would surge. I thought for a long time and saw this as a rare opportunity to make money, so I went all in—using 20x leverage on the only exchange that allowed margin contracts at the time to go long on Bitcoin. That night, I fell asleep dreaming happily. As you can guess, the next day I woke up to disaster—overall loss of 91%. That was my first contract trading experience. Not long after, I got liquidated. Bitcoin never surged again. Later, the "big brother" told me they had been scammed, and almost everyone in the group got liquidated.

Second Pitfall: Borrowing to Leverage Trade

In that investment, I went all in with my entire savings. Actually, that's not entirely accurate because I also borrowed money from others—meaning I used leverage beyond my capacity. I was unlucky the first time I borrowed to trade and got liquidated. But I was also fortunate because I borrowed from my own parents, so I didn't face debt collection—just the guilt of temporarily not being able to repay.

Third Pitfall: Believing in Celebrity Effect and Whitepapers

2015 was the year of ICOs for altcoins. To keep up with market changes, I started studying the fundamentals of altcoins. Due to limited time, I mainly invested in tokens endorsed by big figures, trusting KOLs' opinions, and reading whitepapers. When I saw impressive whitepapers, I couldn't help but "throw money." In the end, I was left with a mess. The most typical example is EOS—I bought from $7 to $100, and even started believing the joke "after three waves, it will reach 100."

Fourth Pitfall: Blindly Bottom-Fishing

Many people, like me, experienced the biggest black swan in crypto—the Luna collapse. I learned Luna might collapse at $35, so I decisively shorted. That night, Luna dropped to $10, and I couldn't believe my eyes seeing the unrealized profit on my account. That night, Luna fell as low as $1. I thought "it's fallen enough," so I closed all shorts and went long at the bottom. Everyone knows what happened next—Luna fell into a death spiral. I don't even remember how many zeros were added, but I got liquidated again. Not only did I not make any profit, but I also lost my principal—like a fleeting dream.

Fifth Pitfall: Obsessing Over Short-term Trading

Last year, I found some unused accounts and suddenly decided to tally up my overall profit and loss over the years. As I calculated, I realized I couldn't just count fiat losses; Bitcoin losses are more direct. I was shocked to find that over the years, I had lost over 500 Bitcoin. It's ironic—I started bullish on Bitcoin in 2015, a die-hard bull, but after all these years, I suffered a huge loss. Reflecting, I realize I did too many short-term trades, always trying to buy low and sell high, catching both sides. This is called "illusion of high returns" in psychology, intertwined with multiple cognitive biases, emotional drives, and behavioral inertia. The so-called "making money in a bull market" and "earning coins in a bear market" might actually be a false proposition. The biggest way to make money is simply to buy and hold without selling.

There are many more pitfalls I've encountered over the years. Today, I share these as a humble offering. Finally, here are some tips to avoid pitfalls:

1. Be cautious with insider information. The market size of Bitcoin is now substantial, and information is generally symmetrical. When you receive insider info, always consider "how many hands" it has passed through.

2. Never borrow to invest. I saw a KOL on WB encouraging small investors to borrow money to go all-in on a single opportunity—that's reckless. If you lose your own money, you only lose what you have now. But if you borrow and get liquidated, you're overdrawing your future.

3. Don't short in a bull market, and don't bottom-fish in a bear market.

4. Always, in any situation, hold spot and accumulate coins on dips.

Of course, after so many years of trading, besides blood and tears, there have been moments of joy—selling high and buying low, catching both longs and shorts, and overnight doubling your money. I believe the crypto boom hasn't fully passed. Sharing my pitfalls is also to remind everyone to respect the market, stay calm, and keep a balanced mindset. May everyone go out in style and return with a clear mind.