Survival tips for crypto investors: It’s a loser’s game, staying alive is the key

If you survive, you have no choice but to succeed.

Charles D Ellis (a senior investment expert who is still alive) categorizes modern (traditional finance) investing as a "loser's game" (and I agree).

There are two types of games:

Winner's game: winning is determined by superior skill beyond expectation

Loser's game: winning is determined simply by making fewer mistakes than other players

In the early days, crypto was a winner's game - playing and winning required above-average technical knowledge.

Today, I think crypto has largely evolved into a loser's game - just surviving is enough to win.

(This is not a binary turning point, but a change that has occurred since 2020 as professional players have gradually increased their participation)

But please note: whether in crypto, traditional financial markets, or most things in life, there will always be winners and losers.

Take the meme coin craze (a manifestation of speculation in this cycle) as an example. To win, you may need some technical knowledge, understanding smart contracts, monitoring liquidity pools, and perhaps a lovely group of followers on Twitter so that you have exit liquidity to sell.

Winning is winning, regardless of whether you cross legal or ethical boundaries. I won't say it's right, but I do recognize that it is a way (recognition is not the same as approval).

If your inner sense of justice starts to burn, then let me warmly welcome you to the world of crypto. If you can make money in a permissionless way, you can also lose money in the same fucking way, and Lazarus Group (North Korean hackers) say hello to you. From the perspective of a loser's game, you "win" because you don't participate at all because you know you don't have a significant and lasting advantage to actually win.

Memecoin is a zero-sum (or even negative-sum) game, but that doesn't mean no one can make money. Someone is definitely making money, the question is whether it is you? There is an old saying that if you can't find the rookie at the poker table, then the rookie may be you, which seems to be very appropriate here.

Another example of winners in a winners’ game:

As a degen, I was personally involved in the frenzy of “Food Farming” (note: DeFi summer), mining those worthless tokens.

My advantage at the time was that I clearly knew that these tokens were worthless, so I understood that it was suicidal to hold them for a long time or participate in the attractive high APR Pool 2.

So, being a cautious person, I mined a large number of soon-to-be worthless tokens from Pool 1 and repeatedly withdrew funds from the liquidity pool until they were zero.

The winners in the losers’ game are those who did not participate in DeFi farming at all and eventually survived the 2021 bull run, while the competitors eliminated themselves.

It’s all about advantages

What I want to say is that in any game, you need an advantage to win.

I know this sounds unfair to the average speculator who has no fan base to dump tokens at will, but life is not fair.

The correct response is not to complain about the unfairness to ordinary speculators, but to reflect on what should be done in the real situation. Double down, dig deeper and do "due diligence" so that your trench tactics can give you an advantage? I am not sure about this.

Immediately, someone will refute my cautious anti-trench mentality, thinking that because I am already rich, I am high above and no longer need to fight in the trenches for 100x returns.

However, let me clearly remind you that there is on-chain evidence that I only have 1 ether, so if anyone needs to fight in the trenches, brothers and sisters in the cryptocurrency circle, it should be me.

To some extent, we are all playing the dumping game with each other - everyone just operates in different time periods.

How to get an advantage?

So, if you are not actually a genius, how do you get an advantage?

Step out of the game and look at the big picture.

You win by choosing to only play games where you have an advantage and survive.

Specifically:

Whether the market has peaked or this is just a bear trap (which is the biggest I’ve ever seen, by the way) (but at the same time, they don’t trap me) is surprisingly not that important.

What matters most is that you survive, no matter what happens. I think that simply involves having enough reserves so that you are never forced to sell too early, or forced to participate in the hunger games of negative expected value where you have no advantage.

A portfolio of only cash and crypto, if sized correctly, will allow you to stay “stupid” longer than most people without going bankrupt.

This is my Fortress of Solitude.

(Well, at least that’s my version. The gambler’s version is actually more defensive because you live off the interest on your portfolio, while my version is to artificially create a payout that matches your upside risk and defense funds by splitting the portfolio into upside risk and defense funds, which only lasts as long as your reserves.)

Instead of going 100% all in crypto, why not go a little lower, like 90% crypto and 10% cash? Or whatever number works for you to guarantee survival while maintaining exposure to the market.

What if the market has peaked - and you are sitting on a ton of cash + other crypto assets - and the market goes to hell for the next 4 years?

No worries. You'll be fine. Most other people - probably not.

What if this is the biggest bear trap I've ever seen (which won't trap me, by the way) and you are sitting on a ton of cash + other crypto assets? Instead of super amazing gains, you end up with amazing gains.

Play the world's smallest violin and mourn the fact that you are only a billionaire and not a billionaire.

In summary, my point is that the real tangible advantage you can create for yourself and use to win is to not die.

Survive and you'll slowly notice that the people around you tend to blow their own heads off (too soon?).

Those publicly profiled suits don't talk about this because they can't. They don't have this advantage. They need to write reports, tweet thought leaders, underperform benchmarks, and please investors.

Only individuals like you and me can actually adopt this strategy and use this advantage. Sitting in your fortress of solitude and saying "screw you" to everyone else doesn't need to be a last resort - it's a way to live your life to choose and enjoy.

Simple Winning Strategy

You don't need to do anything fancy or special to win.

You don't need leverage, options, perpetual contracts, futures, etc. In fact, you don't need to know or do almost anything. Leave it all behind. Enjoy the eternal sunshine of a thoughtless mind.

You just need to not do anything stupid while everyone else is killing each other, killing each other, and killing themselves financially. The weak are eliminated from the group. The strong survive, and we survive to die another day.

Just don't die.

If you survive, you have no choice but to succeed.