In a bull market, it seems easier than ever to seize the opportunity to make money, but blind pursuit may lead to huge losses or even miss the entire bull market. This article originates from a tweet written by Riyue Xiaochu, compiled and written by Shenchao.
(Recap:The story of the first college student to get rich in crypto history: How did I collaborate with Satoshi Nakamoto? )
(Background supplement:Review of Bitcoin’s fourth halving: How strong was Wu Jihan, the Chinese mining tycoon back then! )
1 Although the bull market is generally rising, the speculation is still centered on the sector. And if a currency skyrockets, it will drive speculation in its sector.
2 Opportunities are everywhere in the bull market, but if you are greedy and try to seize them everywhere, it will definitely not be good in the end.
On the contrary, as long as you catch the main rising wave of a sector, it is enough for you to make a lot of money. If you are lucky and seize the plate rotation and catch the 2 main rising waves, you will make unimaginable wealth.
3 The difference between this bull market and the past is that there is a lot of money, a lot of people, and a lot of professional institutions.
Therefore, the trading strategy is adjusted to:
1) Instead of chasing hot spots, it is better to focus on good projects/sectors and the returns will be higher;
2) Huddle with a group of professional people to keep warm;
3) The market value valuation of hot projects is relatively sufficient, while non-hot sectors may have high multiples;
4. It is necessary to distinguish the difference between awesomeness and potential income. A very awesome project may not necessarily make you money. The reason is still that the market will fully price it. That is to say, what everyone is optimistic about does not necessarily lead to a very large increase.
I would choose:
1) It is definitely recognized by the market but not favored by the general public. It is a key research object, so the potential returns are high and the risks are low;
2) A sector with low market popularity, as the mini warehouse lottery sector;
5 Although it is very satisfying to hold a full position in one sector, you may miss out on the entire bull market, which is not recommended in terms of high risk. A centralized + limited quantity approach is recommended. Divide into several key points and sub-key points. The overall quantity is controlled at a certain level.
6 There are three types of speculation in sectors:
1) Major events with high certainty, such as the Shanghai upgrade leading to the hype of LIDO and SSV, and Arbitrum’s airdrop of tokens triggering the rise of its ecological projects;
2) Sudden events. For example, the sudden popularity of chatgpt triggered an explosion in the AI sector, and the release of Sora also triggered a wave of rise. Another example is that in the second half of 21, the popularity of the Metaverse triggered a craze in the currency circle GameFi;
3) After a certain coin explodes, it becomes the leader, causing a surge in projects in its sector;
Most of the time, the speculation in the sector is uncertain, which is why we have to wait for the wind to come in the bull market. Because there is no way to determine the timing of the hype. Only the first type of major event is relatively certain. But its disadvantage is that because it is relatively certain, the increase you can participate in may not be very large. That’s because there are always many people planning ahead. The most typical one is this year’s Cancun upgrade. The growth rates of arb and op lagged behind other currencies.
In the past bull market, there were two strategies
The first type: all assets are heavily invested in certain sectors
All that needs to happen is for the bull market to catch wind. The advantage is that it is simple to operate, so it is suitable for most people and those who are busy with daily work. The disadvantage is: it needs to be held. Being able to hold it is a test of human nature. Especially when you see coins that make you rich everywhere, but yours remains unchanged.
I suggest that the number of specific sections is 2 to 4. If you want to have just one, you can do it, but it needs to test your personal vision. Too much is risky and not recommended.
The second type: part of the positions are latent, and part of the positions are taken up when the sector is speculating.
The advantage is that it can be advanced and retreated, and it is relatively flexible. But the disadvantage is that you need to be more sensitive to the market, have more experience, and always focus on the market.
