Original link: 《Crashes, Manias and Panic's 》
Translation: Ken, Chaincatcher
The outside world feels incredibly harsh, hopeless. Everything is over, you missed the opportunity, and you messed up again.
Everyone feels angry and confused. Even those who foresaw this scene feel relieved but understand the extent of the damage this price movement has caused to others. It feels like the worst of times.
I have been in the market for 38 years (today's sell-off is quite a birthday gift, especially with my food poisoning last night!). I have witnessed various crashes and panics.
They all feel the same. Terrible.
I got into cryptocurrency in 2013. At that time, I bought Bitcoin for $200 for the first time.
After buying, it rose a bit, then plummeted by 75%… and this was during a bull market, eventually rising to over 10 times my entry price. I didn't sell because it was a long-term investment, and I understood the risks.
Then in the bear market of 2014, it dropped by 87%.
The subsequent bull market lasted until 2017, during which I experienced three sell-offs of 35% to 45%… it was brutal. Ultimately, due to the Bitcoin fork wars, I sold at $2000 (the previous high in 2013).
I made 10 times my initial entry point. But before starting another huge, ugly bear market, it rose another 10 times by the end of that year (!!).
I avoided that entire bear market, and it felt good.
I re-entered during the COVID pandemic crash at $6500 (3.5 times higher than when I sold). That was a costly mistake, even though I thought I was doing the "right thing" at the time.
In 2021, Bitcoin dropped 50% from April to July, and the market conditions were very similar to now. The sentiment on Twitter was terrible. Really bad. But at that time, the market wasn't as oversold as it is today…
By November 2021, the market returned to an all-time high. Solana rebounded 13 times from its low. Ethereum doubled. Bitcoin hit a new high, rebounding 150%.
I experienced all of this firsthand. Every terrifying, gut-wrenching moment happened within a long-term structural bull market.
My first entry price was $200. The current price is $65,000. In between, I missed out on 3.5 times the gains by trying to time the market (and doing a poor job of it).
The first key lesson here (for me) is that in a long-term rising asset, what you need to do is nothing. The reason "HODL" became a meme is that it has ample justification. It is far more powerful than the meme of 4-year cycles.
My second lesson is to aggressively accumulate during sell-offs. Even if the timing is off, buying in batches during weakness to increase your overall position will greatly compound returns over time, even better than dollar-cost averaging.
I don't always have cash to buy heavily during sell-offs, but I always buy a little because it is good for training the mindset.
You always feel like you've missed the opportunity, that it will never come back, and that everything is going to be completely ruined. That's not true.
Ask yourself two questions:
Will tomorrow be more digital than today?
Will fiat currency be more devalued than today?
If the answer is yes, then keep going. Buy the dips, let "time in the market" beat "timing the market," because the outcome is always so. Accumulating during massive sell-offs will lower your average cost. This makes a huge difference.
In this process, stress, fear, and self-doubt are expected "taxes."
Position management is crucial for your risk tolerance. Don't worry, everyone feels overexposed during downturns and underexposed during upturns. You just need to manage those emotions and find your comfort zone.
Another key point is not to blindly trust others' opinions. Doing your own research is a very important principle. Without it, you won't make it through these tough times.
You need to earn your beliefs through strength. Renting beliefs is like leverage; it will ultimately leave you with nothing.
Remember—when you're busy blaming others, you're really just blaming yourself.
Yes, it feels very dark outside. The sun will rise again soon; this is just another scar on the journey (as long as you don't use leverage! Leverage can lead to permanent capital loss because you will lose your bets to the casino). Never lose your principal.
When will all this end? I don't know, but I think it feels more like the panic from April to November 2021—panic in a bull market. I believe it will end soon. If I'm wrong, I won't change anything. As long as I have cash, I will continue to accumulate.
But for you, the situation may be different. Try to build a portfolio that minimizes regret. Can you withstand another 50% drop from here? If not, reduce your position, even if it feels stupid to do so. Having the right mindset is crucial for survival. And my mindset has shifted to "How can I buy more," even if your thoughts might be the exact opposite.
There will always be some market timers who can accurately predict the timing of sell-offs, closing positions or shorting. This situation will always exist. But honestly, you just need to tell yourself that this situation is predictable at any time. That way, when it actually happens, you won't feel stressed because you anticipated it! It becomes part of the story, not the whole.
What am I doing now?
I have also started buying some digital art (which also counts as increasing my Ethereum holdings), and next week I will seek to increase my cryptocurrency allocation, just like I do every time such an opportunity arises.
I bought during the COVID pandemic sell-off, the 2021 sell-off, the 2022 sell-off, and the 2023 sell-off; I will do the same in 2024 and 2025! This time I will do it again. Every time my gains and losses have set new highs ahead of the market. This strategy is simply brilliant. Once again… buy the dips!
Good luck to everyone. This road has never been easy.
Volatility is the price we pay for assets that provide such long-term compounding returns. Embrace it.
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