CoinRealm.com reports:
Overnight, the bears launched a well-executed deadly ambush. Seizing a perfect moment when Americans were on holiday and Chinese were asleep, they struck again, swiftly attacking down to 55k, breaching the April 1st low of 56.5k. The bears were eager to sketch out a downtrend.
It was mentioned yesterday that this violent washout primarily targeted the recent six-month hype around the spot Bitcoin ETFs touted by American institutions and the well-known Bitcoin halving event, both of which attracted newbies rushing into the market.
Wang Ge, who diligently tends the fields daily, has the freshest firsthand perspective. Let Wang Ge tell you: which month in the past six saw the most enthusiastic influx of newbies?
That’s right, it was March 2024. During that time when BTC first broke its pre-2021 high, soaring to a record high of 73.8k, forming a local peak…
The newbie village of financial markets is the opposite of online gaming. Here, there’s no newbie protection; instead, there are additional debuffs.
Newbies and seasoned investors share the same desire: to make money. However, their key difference lies in the chips they hold. Newbies want to make money but lack the chips. Seasoned investors want to make money and can capitalize on the eager newbies entering the market, which is also known as distributing chips.
The intrigue of financial markets lies in their optical illusions: at any given moment, it’s impossible to see who’s gaining and who’s losing. One must view time as a dimension to uncover the secrets behind it.
At the $70,000 peak, no one loses money. People use astounding rhetoric: BTC hits a new high, all historical purchases are profitable!
In reality? Those who sold at $70,000 in March earned the money of those who panicked and sold at $57,000 in July.
Of course, if you can break the uni-directional arrow of time, imagine time as a spatial dimension where it can move bidirectionally in your mind, then you’ll discover:
Those who sold at $70,000 in March also earned the money of those who sold at $16,000 in December 2022. This is earning money first, losing money later.
Those who sold in March 2024 earned the money of those who sold in December 2022. This is losing money first, earning money later.
Time in the financial magic world has become a bidirectional elf.
In the face of such an elf that breaks the constraints of time’s unidirectional dimension, human intelligence and imagination are somewhat insufficient.
What’s even more devastating is that this is far from over.
Did those who sold at $70,000 in March really make money?
That depends on what “money” is. What is “money”?
In Wang Ge’s view, when Wang Ge adds to his position at $55,000 in July now, he earns the money of those who distributed chips at $70,000 in March. They lost money first, Wang Ge gains later.
However, as mentioned above, looking at the timeline in reverse, one could also argue that when Wang Ge bottom-fished at $16,000 in December 2022, he already preemptively earned the money of those who sold at $70,000 in March 2024. He gains first, they lose later.
Why did those who sold at $70,000 in March 2024 lose money? Because unless they never enter the market again in this life, the next life, or even for generations, and never buy BTC again, someday in the future, at a higher price, such as $100,000 or $1,000,000, they will buy back. Selling 1 BTC today at $70,000 and buying back 1 BTC in the future at $100,000 results in a net loss of $30,000.
Alternatively, if they sell and steadfastly refuse to buy back until 2033 when BTC rises to $1,000,000, their children buying 1 BTC at $1,000,000 inherits a debt of $930,000 from them, and at the moment their children buy it, the debt turns into actual losses.
You might think, if they establish a family rule forbidding future generations from ever buying BTC again, can they avoid this problem? Wrong. If they really manage to prevent future generations from ever buying BTC again, their family may not survive for more than a few generations and will be eliminated by this rapidly changing world.
Dear friends, if you find the above paragraphs confusing, it means you are far from understanding BTC. Please study more!
Insufficient cognition leads you to view BTC as just a stock code, a bond symbol, or a fiat currency symbol, without any differences. With such superficial insight, successful investment is unlikely.
Only by continuously improving your cognition can you truly stabilize and earn money in the long term.
Wang Ge remembered a question repeatedly asked by readers and friends: Why adopt the “Eight Character Maxim” — persistently invest at fixed intervals, and add to positions on dips, instead of “timing the market” and going all in?
“With the ‘Eight Character Maxim,’ a strategy similar to Dollar Cost Averaging (DCA), the returns are generally lower compared to a lump-sum investment at the beginning. Roughly half as much.”
But why still choose the “Eight Character Maxim”?
One common constraint is ability: “For the vast majority, income is monthly, and business money is earned bit by bit.”
Even without this constraint, we encounter another difficult hurdle: human nature.
Whenever you feel deep FOMO (fear of missing out), and eagerly go all in, it often coincides with local highs. After going all in at a high point, you end up standing guard in the wind, disheveled. This was the true portrayal of many newbies going all in at the high of $70,000 in March.
The “Eight Character Maxim” forces you to slow down. Just as you eat a meal bite by bite, you walk a road step by step.
The “Eight Character Maxim” actually has another use case, which is when you want to flee mentally, such as in the current market crash. At times like these when you are fearful, regretful, and doubtful, the “Eight Character Maxim” tells us to “persist” and “add positions on dips.”
The former is the material basis for the latter: only when you can’t resist wanting to go all in and empty your magazine, the “Eight Character Maxim” holds back your hand. It saves bullets for subsequent crashes, buys in during downturns, embraces discounts, buys more as it falls, and sticks to the end.
Why can Wang Ge stand firm in the face of crashes? It’s actually because of two points:
Firstly, persistence pays off enough. Many can foresee $50,000, $40,000, or even $30,000, but who dares to say they foresaw $15,000?
Secondly, constant risk management, always prepared in advance, maintaining sufficient reserves and perpetual cash flow. Even the most beautiful ideas require strength. Adequate reserves and perpetual cash flow are the confidence to withstand any market crash.
So why do beginners always lose money when they buy in? Generally, it’s because they haven’t established the cognition discussed above, and they haven’t done these few things well.
