Let's take a look at the seasoned investors in the crypto industry and the impressive ways they have lost money.

Written by: Ada | Deep Tide TechFlow

After experiencing the major purge on October 11, the crypto market did not see a retaliatory rebound; instead, it continued to decline in November, with Bitcoin dropping below the $90,000 mark and Ethereum falling to around $2,800.

However, for the seasoned investors in the crypto space, these are not significant issues. They have faced greater volatility, endured harsher purges, and even fallen into deeper traps. Those who have weathered the storms often dismiss the market fluctuations with a casual "What’s the big deal?"

Yet, when discussing the past, no one remains unmoved. Some have experienced exchange collapses, others have been cut by so-called insider information, and some have been slaughtered by acquaintances…

Let’s hear their stories and see what impressive ways seasoned investors have lost money in the crypto industry.

Mike: Hit Hard by Exchange Collapse

I am Mike, I entered the crypto space in 2018, and now I am an entrepreneur who has gone through several bull and bear markets and stepped into many traps.

I have two memorable losses.

The first was in 2019 when I sought high returns and put part of my BTC, ETF, and USDT into an exchange for investment because it promised higher expected returns than other exchanges. However, a year later, the exchange collapsed and ran away. The name of this exchange was Fcoin, one of the pioneers of trading mining. At that time, I had just graduated from university, worked hard, lived in a partitioned room, and saved 1.5 Bitcoins and 20 Ethereums. Just like that, it all went to zero overnight. At that time, it didn’t seem like a particularly large amount, but now it has reached a million-level figure.

The second was in 2020 when I received a tip from an industry friend that a certain altcoin was going to be listed on Binance, so I positioned myself in advance. To not waste the precious insider information, I sold two Bitcoins to invest heavily in this altcoin, which was about $10,000 per Bitcoin at that time.

Unexpectedly, after selling the Bitcoins, the price soared to $40,000, while the heavily invested altcoin plummeted by 70%. Although this altcoin was later listed on Binance, it was already meaningless.

Now, I am very cautious about insider information because I do not know if the information that reaches me has already been priced in, and it is also possible that it is false information.

Moreover, both the collapses of Fcoin and FTX surprised many people, as the crypto industry is always susceptible to black swan events. Therefore, I now also allocate to cold wallets to avoid extreme risks. Additionally, I do not put all my assets in the cryptocurrency market; I also have allocations in US stocks, gold, and fiat currency deposits because there is no such thing as 100% safety in this world. Only by diversifying risks can we reduce the impact of potential future black swan events.

Having gone through so much, I have now formed my own logic for analyzing market trends or projects.

First, I look at where the liquidity is coming from. For example, the current wave of money comes from the high-risk appetite liquidity in the US dollar market, leading to an increasing correlation between Bitcoin and the US stock market, essentially placing Bitcoin at the forefront of liquidity risk appetite. Secondly, I pay attention to the long-term trends of projects, focusing on the team and the founder's vision or intrinsic motivation.

Looking back, I want to tell my past self, who just entered the industry, to be cautious and take careful steps, but also to believe in the future of the industry, and then be a bit bolder and braver in the right direction, such as accumulating Bitcoin.

Finn: Hackers and Contracts, Lifelong Enemies

My name is Finn, and I am the founder of an agency called BlockFocus in the crypto space.

I vaguely remember that on April 28, 2018, I charged money on Huobi for the first time to buy Bitcoin, and at that time, I didn’t even know what USDT was.

Back then, I saw an article by Mi Meng where Chang Jia gave investment advice to a college student, suggesting to buy Bitcoin and store it in a cold wallet for five years. I was attracted by this, and later learned that Chang Jia had a project called BitShares, so I used Bitcoin to buy USDT and then used USDT to buy BTM. However, a month later, my BTM lost 80%, leaving me with just over two thousand dollars.

But my first investment failure did not stop me from entering the crypto space; instead, it opened a window for me. In early 2020, I had the opportunity to officially work in the crypto space.

Over the years in the crypto space, I have had two significant losses. The first was at the end of April 2022 when my wallet was hacked due to insufficient security awareness and inadequate preventive measures. Most of what was stolen was APX tokens, which later became Aster, with a total value of over $600,000. If it hadn’t been stolen, I would have achieved financial freedom by now.

The other was on October 11 of this year during the major purge when my contract was liquidated at the lowest price point, resulting in significant losses. To be honest, I am not a full-time trader; opening this position was purely a gamble, but I didn’t expect to be liquidated so precisely.

In addition to these two instances, I also fell into a trap set by a project team.

Last year, I participated in a project that was valued at less than 100 million at the time, but when it launched this year, it peaked at 4 billion. We had previously agreed on a TGE unlock of 10%, but it still hasn’t been unlocked, and they say it will be postponed until next year, but when exactly next year is still unclear. I tried to negotiate with the project team for a refund, but that didn’t work either, so I feel that investors are often quite vulnerable and helpless.

However, I have also identified some promising projects, and the one that excites me the most is Aster.

Aster was formerly known as APX, and I started supporting it at the end of 2021. It is the only project I have recommended to my friends, and I have also supported it with my actions. After my wallet was hacked, I continued to buy APX.

Why did I believe in it when it was still APX?

Firstly, I have a strong belief in the DEX sector, and at that time, the project was valued very low. Most importantly, I verified from multiple sources that this was an internal project of Binance, not something outsourced or done by former employees. Binance has always been thorough in its projects and wouldn’t let internal projects fail, so I dared to bet on it early on.

Over the years, I have experienced ups and downs, seemingly trapped in a cycle, but I still believe this industry is more profitable than others, and being in this space is quite comfortable. It is a circle that allows me to balance work and life. Looking forward to the future, I aim to work hard, avoid contracts, and ski more.

Beyond: Visited by North Korean Hackers

I am Beyond, known as the Deconstructor on Twitter. I first encountered cryptocurrency in 2021 when I was still a freshman.

I clearly remember April 20, 2021, when I saw some videos claiming that Dogecoin was about to break $1, and various profit screenshots were shared online. This got me a bit emotionally charged, so I deposited $10,000 to open a contract, but that night I was liquidated.

Although $10,000 doesn’t seem like much now, for me as a college freshman at that time, it represented several months of living expenses. I found it too difficult to manage, so I didn’t touch it again until early 2023. At that time, inscriptions became popular, and I participated again, gaining some profits. Due to the economic allure, I immediately decided to make the crypto industry my main focus after graduation.

I have tried various businesses in the crypto space, including creating my own inscriptions, running a yield farming studio, providing technical outsourcing for some projects, and now becoming a KOL, managing my own community and Binance Square. I enjoy this lifestyle that offers ample freedom while also providing decent economic returns.

However, after spending a long time in the crypto space, I inevitably fell into some traps.

The most memorable was on August 10 last year when someone posing as an employee of a well-known VC contacted me privately, inviting me to join them. I felt that making money in the market was becoming increasingly difficult and wanted to find something else to do, so I started interacting with them on Telegram.

After about two weeks of chatting, it felt good, and I found their relevant information on a well-known information platform. We had over 20 mutual friends, including some well-known figures in the industry. All the information presented was very convincing, so I completely trusted them, and when they sent a Google Meeting invitation, I gladly accepted.

But as soon as I entered the platform they provided and clicked the link, all my on-chain assets were wiped out, and all my yield farming accounts and Web2 social accounts were also hacked, resulting in significant losses. Later, I learned that they were a North Korean hacker organization.

Another instance was not converting paper wealth into cash.

At the time when inscriptions were hot, there were many hundredfold or thousandfold targets on the Bitcoin chain, but only one hundredfold target emerged on the Ethereum chain. I believed that more hundredfold or thousandfold inscription assets would emerge on the Ethereum chain, so I followed this logic for investment research and eventually discovered ETHI. Later, ETHI rose from $3 to a peak of $4,000, validating my investment logic and vision. However, due to my faith in inscriptions, believing they could revolutionize asset issuance, I held onto it without cashing out, ultimately watching it plummet to zero.

But this experience allowed me to glimpse a corner of the crypto space's crazy beneficial effects and indirectly drove me to decide to delve deeper into this circle for related work. Additionally, it reminded me to respect cycles; no narrative can truly last long, and it’s best to take profits when they are available. The only thing worth believing in is Bitcoin.

Looking back, if I hadn’t entered the crypto space, I might have gone into traditional funds, brokerages, or investment banks, gradually working in the traditional finance industry. However, now, compared to my former classmates, I have a significant advantage in personal development, so I am very grateful for my initial choice and am full of confidence for the future.

Chong Ge: Harvested by Acquaintances

I am Chong Ge. Like many "knowledge payment old users," my crypto enlightenment came from Li Xiaolai's course "The Road to Financial Freedom." My first cryptocurrency investment was not Bitcoin, but EOS.

Before entering the crypto space, I followed the "traditional path": I traded stocks, bought funds, and invested in US stocks. But one day, I realized that after working hard for two or three years, a 50% increase in stocks felt pretty good; however, an altcoin on-chain could multiply by ten or even dozens in just half a month, though it could also go to zero. At that time, I was attracted by this adventurous game.

To say I lost money in the crypto space, I certainly lost a fair amount, but the deepest pit was not "market losses," but rather the acquaintances' schemes.

The most memorable significant loss was not from a specific chain or project, but from trusting a person, which in turn led to the loss of those who trusted me.

In the first two or three years after entering the space, everyone was still quite "sentimental," especially someone like me, who has a simple personality and values loyalty. A friend brought me into a scheme, and I then brought my friends in, thinking that since it was introduced by "one of our own," we naturally relaxed our guard. However, such schemes are often disguised as "projects," "startups," or "blockchain," but in essence, they are Ponzi schemes or air coins. In the end, the project failed, the money was gone, and relationships were damaged.

This loss cost me several million, and I later tried to remedy the situation by communicating with the project team and seeking to protect my rights, but the outcome was always the same:

The money could not be recovered, and the relationships could not be salvaged, leaving only disappointment.

After this, I set a strict principle for myself: if I can avoid bringing others into an investment, I will, especially for things I haven’t fully understood myself. Because once something goes wrong, you not only lose your own money but also involve relationships, credibility, and emotions, which is too costly.

Although I have fallen into many traps, I will definitely not exit the crypto space. Because this is a global game that does not require extensive socializing to participate. As long as the direction is right, one can level up round after round. This is a lifestyle I enjoy, rather than a "game that ends when you log off."

Now, I have a relatively complete investment logic system, but what truly makes me anxious is not "whether I have a system," but whether I have done enough work according to my logic; how much optimization space this system still has; and whether I can productize this system to serve more people.

In this circle, everyone wants to influence you. Project teams hope you believe the stories they tell; KOLs want you to follow them in and out; various groups and social interactions hope to lead you by emotions. But the real starting point is when you begin to stop unconditionally believing in any "authority," able to build your own logic, verify, and deduce for yourself. Before that, you are just an NPC in someone else's system. After that, you may become your own player.

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