Mindset Correction Article | Researcher Summarizes 18 Experience Rules of the Cryptocurrency Market

Finance researcher Route 2 FI summarized 18 rules of experience in the crypto market on Twitter. For more information, please refer to the original post.

Original post link: https://twitter.com/Route2FI/status/1512808926542274567

1. No one is considering your interests

Don't assume that anyone is looking out for your best interests. Even if you feel like you are part of the top community on Twitter, you are ultimately on your own.

In the crypto space, it's player vs. player, and when it comes to the market, everyone is selfish.

2. Extreme information asymmetry

There is extreme information asymmetry on Twitter. You need to understand where the people sharing information are positioned to provide sound advice for your investments.

Following the right people can give you a lot of alpha information, but blindly following the wrong ones may lead to losing everything in the end.

3. Believe in yourself

When the overall market is bullish and you ask what everyone is buying, they might say:

You can't buy when the market is up, idiot.

When the market is down and you ask what everyone is buying:

It's all over, you're an idiot if you buy now.

4. Stay away from the echo chamber effect

You should use Twitter as a channel for seeking feedback, not as a validation bias channel.

If you are considering buying NEAR, also seek opinions from those who don't recommend the token. You might have overlooked something.

Note: The Echo Chamber Effect is similar to the Filter Bubble Effect, where people tend to seek opinions that support their own theories or assumptions.

5. Less arguing, more research

Instead of arguing with anonymous individuals online, spend time reading whitepapers, trying out DApps, asking questions on Discord, or documenting your thoughts.

What you write down will be the best. Write down your arguments before investing in anything.

6. Hold on, don't lose faith

Don't let the idea of "others making money faster than you" crush you. Your long-term holding period is over a year, not weeks or days.

However, if your investment thesis changes, be willing to sell your assets.

Never fall in love with your holdings.

7. There are no assets that always go up

Regarding trading:

• If you feel excited about a holding, sell it.
• If one of your holdings is parabolically rising, sell it.

Nothing always goes up; if you want to survive long-term in the market, you need to take profits.

8. If you don't understand where APY comes from, you are the mine

If you can't explain in two sentences where the interest rates on the DeFi platform you are using come from, you are a contributor to the interest rate source.

9. Narrative is everything

In the crypto space, narrative is everything. The narrative depicted by collective consensus is so powerful; the combination of DOGE and SHIB once approached a $100 billion market cap, reminding me of the saying:

Do you want to make money, or do you want to be right?

10. Don't chase highs

If you find a new project that you are extremely bullish on but delay investing for weeks, don't buy in when it suddenly skyrockets.

You missed your investment opportunity weeks ago; buying in now would mean buying at the top of the market.

11. The joy of making money is temporary

You must understand that the "feeling" is temporary. When you make money, you feel ecstatic, but the downside is that you will constantly try to replicate that feeling.

Overtrading and constantly switching assets may stem from trying to replicate that euphoria.

12. Bull markets for different assets

Every asset will have its bull market. I know you believe in "everything will rise together," but more commonly, specific sectors will outperform at certain times.

Pay attention to emerging narratives in the market and plan accordingly.

13. Focus on your small mistakes

It's better to make mistakes in your 20s than in your 40s; a $1,000 failed investment is better than $100,000.

The first time I leveraged trade in the crypto market, I lost thousands of dollars within minutes. I learned from it and moved forward.

14. Common flaws among retail investors

Why most people don't make money in the crypto market:

1. Buying tokens that have randomly surged to the top 100 in market cap.
2. Relying on YouTubers' videos for investment decisions.
3. Facing selling pressure from early investors.
4. Always thinking these tokens are already too well-known.
5. Buying when prices are rising.
6. Selling in a downturn.

15. Slow and steady wins the race

Give yourself time. We all want to get rich quick, but please win this race slowly and steadily.

Remember, out of Warren Buffett's $84.5 billion net worth, $81.5 billion was earned after his 65th birthday, which is more than 96% of his net worth.

16. Pursue freedom, not retirement

"Retirement" is like a vacation on a beach in the Caribbean, but you get tired of it after a week.

"Freedom" is waking up and being able to do whatever you want, building things with cool people, and having plenty of time to spend with family and friends.

17. A full-time trader?

If you truly want to give up your stable 9-5 job and transition to a full-time job in the crypto industry, ask yourself, "Are you willing to be online for 10-16 hours a day, 7 days a week, for several years?"

Even then, success is not guaranteed.

18. Set goals beyond making money

When you eventually succeed in the crypto space, you will find that it's not what you wanted. You have money, but you are still you.

Set more life goals beyond money; otherwise, even if you make money, you will end up feeling depressed and joyless.