Enter the market with 100,000 U. Five traders teach you how to achieve the "100 million small goal"

ETFs have been approved, the Fed is about to cut interest rates, BTC is about to halve, and the US election is approaching; coupled with the rise of Solana, the Ethereum Cancun upgrade will be completed, and the Ethereum spot ETF may be approved. All these signs indicate that the potential of the crypto industry in 2024 is far from being realized.

The bull market is coming. Both practitioners and investors are looking forward to gaining something in this bull market. Where is the code of wealth? How to invest? The sooner you understand these two questions, the sooner you can be prepared to cope with the changing market.

Today’s recommended reading in Bailu Living Room: Followin’s annual X Space invites 5 researchers: Zhang Xiaoyu, a well-known hedge fund manager; Jason Chen Jian; former Amber Researcher Haotian; Nakamoto Sumire; BTCdayu, to summarize and share their practical investment experience.

Q1: What is the most satisfying cryptocurrency investment in 2023?

Zhang Xiaoyu: One of the more successful investments in 2023 was ORDI. The initial entry price was between 3U and 6U.

Speaking of ORDI, on the one hand, it makes money, and on the other hand, I think it is a breakthrough in my investment style and method.

I will not invest in particularly early projects in the cryptocurrency circle at the beginning, because I cannot see clearly whether it is really reliable and can succeed. In the cryptocurrency circle, projects do not have particularly strong product concepts and strong cash flow expectations.

Using the traditional financial world’s explanation, ORDI is still in the Pre-A round and Angel round. At this point, it is difficult to judge whether it can last long? Is the trend established? Can the traffic continue?

The reason why I invested is that the risk appetite is indeed higher in 23 years. In addition, I believe that Crypto should still dare to invest in relatively early projects, especially when new assets, new tracks, and new trends emerge.

It's not just about daring to invest, but also about the degree of investment. As it rose higher and higher, and its value became higher and higher, I made additional investments. I sold some of it when it fell to $46 after rising in the middle, and then added more when it rose back to more than 50. In short, I did a lot of operations that I would not have done before. There were some breakthroughs in the psychological and mental aspects.

Haotian: I am more satisfied with Solana in the public chain track, I got a good bargain.

Why buy at the bottom? In the last round of public chain competition, everyone said that Ethereum would be killed. This round of narrative is who will become a supplement to Ethereum, achieve performance that Ethereum cannot do, and attract the Ethereum ecosystem.

From this logic, we can see that Solana has a chance. At that time, Solana was not very powerful due to SBF and chain downtime, but after research, we found that the technical foundation is that it supports high concurrency, and its performance is actually superior, close to the capabilities of Web2, and can provide infrastructure services to the Crypto industry. It holds various hackathons every year, the developers are active, and the founders have various backgrounds. The price is low. So I think there is a chance.

Then there is Metis. I thought that the ecosystem of the four kings of Layer2 was in a mess, and there was no progress in technology, and it was stagnant, especially the decentralized sorter. I found that it was not because of the poor technology, but because they were unwilling to do it. They relied on the sorter to make their power reach the peak, and they were reluctant to give it up. At this time, I thought that there must be projects that would challenge them on this point. Metias was eye-catching, and it was serious about technology. It was a successful copycat.

Therefore, I invest from the perspectives of narrative, business, and ecological positioning.

Sumire Nakamoto: Let me tell you the logic behind my heavy investments in SATS and RATS.

Often in a bull market, the price of a coin will increase dramatically. For a coin with strong explosiveness, the multiple will not be just a little bit. It is good to buy a coin in its very early stage. But if you realize it later, you don’t have to feel sorry after it rises. You can take advantage of its middle and later stages. You need to consider:

(i) A very popular track; (ii) It must be a blue chip stock; (iii) Wait for an entry opportunity with good technical aspects; (iv) Take advantage of the next wave of gains.

This is not the point, I want to express a point of view. Many newcomers hear the most about getting rich quickly, and they think that this is how to make money in the cryptocurrency circle. This is wrong. Getting rich by speculating in cryptocurrency is not determined by a single profitable transaction, but by countless transactions. Some contract players definitely have their moments of glory, but in the end they may not make much money. My suggestion:

(i) Many retail investors are very concerned about whether a certain coin makes money or loses money, and how much they make or lose. I pay more attention to the management of the overall capital curve. It's like fighting a war, not caring about the gains and losses of a city or a pond.

(ii) When you pay too much attention to whether a certain currency can make you rich, the risk is difficult to control, and the entire investment return curve will go up and down like a roller coaster. Others may remember you because of a successful transaction, but you must know that the most important thing to make money in the currency circle in the long term is to avoid fatal losses.

My most satisfying investment in 2023 was that I didn’t move for 5 months and didn’t lose money. From May to October 2023, my position was very small, 5%-10%. In October, the news of BTC ETF came out, and I thought the whole trend was reversed, so I started to invest heavily.

When the market is garbage, there is no money-making effect. The more you struggle, the more capital you lose. The most important thing is to keep your hands off.

BTCdayu: Mr. Zhang talked about the changes in his investment style. I learned one thing - iteration. The cryptocurrency circle is a circle that changes and develops very quickly. Its most important ability may be iteration. Haotian is a technical person. He captures opportunities from a technical perspective and earns dozens of times the profit. It is very scary. I agree with Zhongben Suan. It seems that it is indeed easy to lose a lot after making a lot of money. He said that the most satisfying investment was one that he did not operate for several months. It is very philosophical.

Let me talk about my 23 years of TIA investment, which has been an evolution for me.

TIA was launched not long ago, and VC asked me to buy it, but I didn't. My characteristic is that I study it thoroughly before buying. I also have a prejudice against it in my heart. I think there are hundreds of public chains, and it is so expensive, what is there to buy? Then, Vitalik wrote two consecutive articles on the legitimacy of Rollup. After my research, I found that its DA is the main business of Ethereum, which means that the core technology of Ethereum is being robbed. I am a narrative player, and I see a project that even Vitalik feels threatened. It is awesome, so I buy it. Later, it has a good trend, and it is a long-term promising project. It is better in modularization and DA narratives.

Chen Jian: Let me talk about Solana. When I was 18U, I wrote an article about why I should buy it. I didn’t expect it to be so strong. I sold half of it at 34, and then I found that the momentum could not be stopped. When it rose back to 34, I bought it back. I started to ship it out at 60-70.

I personally prefer to do research, and I enjoy finding a potential stock to buy through a large amount of signal analysis and fundamental analysis. No matter how much I earn, the sense of accomplishment from this method is very strong.

Q2: How to quickly summarize the investment system in 5 minutes?

Zhang Xiaoyu: Rather than calling it a system, I think it is an investment principle. Two points:

(i) Investment strategy. Consider the asymmetry between the “downside risk” and “upside potential” of the investment target. Find targets with limited downside risk and unlimited upside potential. The cryptocurrency market often has too much upside and downside potential, and the speed is very fast. The emotions come and go faster than any other market. Be sure to pay attention to this logic.

I am experimenting with small-cap targets, and through screening, I find assets that are not so easy to return to zero, so I can intervene relatively early and relatively cheaply. Of course, this strategy must also be combined with a selling strategy, including a stop-loss method.

(ii) When investing in cryptocurrency, I pay much attention to building a good input information system and interpersonal network, which may be better than a specific investment strategy.

This network plays a big role in the bull market. First, it captures, screens, and analyzes information. Second, it makes up for one's own weaknesses.

Haotian: I am not very keen on cryptocurrency trading, and I spend most of my time on investment research. I tend to analyze and select targets from the perspectives of politics, technology, and business ecology.

(i) Politics: Crypto is all about politics. The reason behind the ETF is that the United States wants to consolidate the hegemony of the US dollar, and Wall Street took the opportunity to infiltrate the Crypto industry. Looking at the projects heavily participated by US capital, I think there are opportunities. Chinese people speculate on inscriptions, and foreigners play MEME on Solana, which is also politics. TIA's DA is also a political opposition to Ethereum. Vitalik Buterin has written many articles calling for the protection of Ethereum's DA capabilities.

(ii) Technology: Why are new public chains so popular? Part of the reason is that Ethereum has not been implemented as expected. Many Ethereum projects are working on resolving its technical flaws, such as account abstraction, which is a patching behavior. Therefore, there will definitely be Ethereum disruptors. Solana has high concurrency. SUI is based on the MOVE language and has security. Including those who do parallel EVM. All have opportunities.

(iii) Strategic positioning: I have been focusing on two directions, DA and interoperability. DA is the core capability of Ethereum. Xinrui Chain wants to compete with Ethereum for resources. The first thing it thinks of is to do DA, to block Ethereum's neck, and to make a short-term narrative to gain market recognition. Celestia needs to be paid attention to. Celestia wants to extract the Ethereum ecosystem, and Eigenlayer wants to help Ethereum keep the ecosystem and fight against third-party DA. It is also quite interesting.

In addition, Altlayer is also very interesting. It allows those small and beautiful Layer2 to develop in a very lightweight and modular way using the components it provides. This is a very good business model. It actually hits a trend of modularization and lightweighting.

In short, you can look for trends first, then look for projects to see how they perform in the secondary market, and if you feel they are undervalued, consider whether to invest.

Zhong Bensuan: When investing in the cryptocurrency circle, what is the first goal you should consider? My goal is to make small profits and small losses frequently, make big profits occasionally, and never make big losses.

There are four points to achieve the three goals: make the least investment, place the heaviest position, quickly reduce the holding cost, and use the grid to happily do long-term investment.

How to make the fewest moves? Answer: Only make moves when there is a perfect opportunity.

I have been in the cryptocurrency industry for seven or eight years, and for a long time I was particularly confused. I was very busy and tired, but in the end I didn’t make much money. I wanted to “improve my skills”, do more in-depth research on the target, grasp the better technical entry opportunities, control my positions, in short, to be “more extreme”.

Finally, I found that they were all dead ends! What should I do in the end? Don’t do addition, do subtraction. Never make a move unless there is a particularly good opportunity. What is a great opportunity? First, you need to understand what a junk opportunity is. I have summarized the “five no-trades”.

(i) Do not place orders when the market is not good. Be patient and wait for the market to change. Many times, we are afraid of missing out on the secret of wealth and rush to increase our positions. In fact, in every bull market, BTC has at least 3-5 pullbacks of more than 20%. You can definitely wait for such a large pullback opportunity.

(ii) Don’t trade without in-depth research. Many big guys will tell you that this coin is great, but if you don’t study it yourself, you won’t be able to hold it, and you don’t deserve to make this money.

(iii) Don’t trade if the technical pattern is not good . This is to break the information cocoon. The more you study a coin, the more optimistic you will be. Apart from the fundamentals, you cannot see some decisive factors, such as the chip structure and key players. My experience is to use technical evidence. When fundamental research and technical information conflict, I will definitely listen to the technical side.

(iv) Do not make a trade if the profit and loss ratio is not ideal. Look for asymmetric opportunities like what Mr. Zhang said, and look for opportunities with particularly ideal profit and loss ratios.

(v) Don’t trade when you are not in a good state. After a big loss, you will be eager to recover your capital. Don’t trade after a big loss. Don’t trade after a big profit. You will not cherish the money and your risk appetite will become particularly high. Whether it is profit or principal, it is money, there is no difference.

What is the heaviest position? Answer: If you do in-depth research, you will take a heavy position.

Some people use this to defend themselves today, and use that to defend themselves tomorrow. Are you here to trade in cryptocurrencies, or to be a security captain?

What is the quick reduction of holding costs? Answer: Build positions in batches and reduce positions when profits are made.

Many times, the reason why you can’t hold on is because the holding cost is not advantageous. If the cost is low, you can hold on easily.

How to reduce the holding cost of the coins that have risen? I think you should build positions in batches, don't rush, and reduce your positions appropriately after making a profit. The other extreme is the so-called "zero cost holding", which I think is unnecessary. Your ultimate goal is to hold as many positions as possible, safely and comfortably.

What is grid trading? Answer: Happy long-term trading.

To make big money, you must do long-term investment. I have never seen anyone who can make big money by rushing around all day. The challenge of long-term investment is that the fluctuations will be very drastic. You may not be able to hold on to the big profits, and you may lose everything if you hold on. You will be very entangled. Grid trading is to make money in the volatile market.

Chen Jian: Two investment experiences.

First, do everything possible to get first-hand information and avoid second-hand smoke. I spend about 5 hours a day on forums, DC, and blogs, looking for information. I spend less time on Twitter.

Second, we need to strengthen our ability to retrieve and process information, and find valid information by eliminating the signal and noise. The details are very complicated, and I have written two articles that give a relatively comprehensive summary. You can go to my Twitter to read them, and I won’t take up too much of your time here.

BTCdayu: My investment system can be summed up in four words: "Be sure + invest heavily".

How to make a good judgment: At the beginning, I focused on fundamentals, but later on, I was best at narrative. Narrative is to judge how many people recognize it in the end. The higher the attention, the more it will rise. For example, TIA, something that even Vitalik is afraid of, has a strong narrative.

In addition to public information, it is best to have more high-quality information sources and consider issues from the perspectives of institutions, funds, dealers, project parties, etc.

How to buy a heavy position: When I bought 1U, I only bought 1 million RMB of ORDI. Is this considered a heavy position? The position was not enough for my capital chain at the time. But at the time, I thought it was a very suitable position. At that time, I usually bought 10 Ethereums for local dog, which was better than local dog, so buying 1 million RMB seemed OK. But now I don’t think so anymore. Similar to what Nakamoto Suan mentioned, I will reduce the chances of selling. If it is really good, I will try my best to buy a heavy position in terms of economy, emotions, status and other aspects as long as I can afford it.

The premise of heavy positions is that you really know a lot. Knowing a lot can also be a pitfall. You may miss a fatal piece of information. You will lose a lot.

Finally, let’s talk about the “selling strategy”: I often say “only valuation, not prediction of valuation”, which means that I judge that it is not cheap now.

At that time, I saw that ORDI had a market value of 21 million US dollars. At that time, a meme coin could be worth 200 million or 1 billion, and Dogecoin was worth 60 billion. The first coin on the Bitcoin chain, meme

Is 20 million expensive? I think it's OK, cheap. I value it, but I don't predict it. I can't predict it. I don't know when it will rise or how much it will rise.

Q3: Where are the investment opportunities in 2024?

Zhang Xiaoyu: I have an experience that talking about the outlook at the end of the year is nonsense.

Now you can see a lot of discussions, such as Bitcoin L2, Depin, Solana ecosystem, Ethereum Restaking, etc.

My attitude is not to predict, but to respond. I pay a lot of attention to building information and interpersonal networks, which is prepared for this thing.

Sumi Nakamoto: I think as long as you pay a little attention to some of the main narratives in the cryptocurrency world, it is unlikely that you will miss out completely.

I personally think there are three tracks with more opportunities: Solana ecology, AI, and Depin.

But this conclusion may be overturned at any time. Always be eager to learn about new tracks and new opportunities.

Haotian: First: Layer 1 emerging public chains. For example, the MOVE system, which supports high concurrency, is relatively safe, and has great advantages over other development languages.

Second: integration of interoperability. Today, we have many chains, liquidity is fragmented, and user experience is poor. This type of project connects various chains and lowers the user threshold. This concept is very good. For example, ZETA, you can pay attention to it. There is also Particle network, which has united more than 50 chains to carry out inscription movement, which is quite popular and has strong integration capabilities.

Third: modularization. VCs are optimistic, imagination is huge, and various resources in the industry can be integrated in a short period of time, and the market is prone to FOMO. TIA's performance is obvious to all.

Fourth: Layer 2. Although there are OP, ARB, etc., some disruptors have performed outstandingly, such as Metis and Blast. Once the ecology of these disruptors improves, the future is limitless. I don’t think Blast is Layer 2 at all, but it has indeed changed the industry’s imagination of this track. It is likely to bring market FOMO, which is worth anticipating.

Chen Jian: First, the game track. First look at the chain, then look at the specific game. Here, I think XAI still has great opportunities.

Second: modularization and chain abstraction, I will not go into details.

BTCdayu: First, modularity. TIA is a good thing, but the difficulty is that it may be difficult to start with now.

Second: Chain abstraction. For example, ZETA is listed on OKEx but not on Binance, so its liquidity is relatively poor, and there is also some information gap. As for the narrative that it is not listed on Binance, I am not sure whether OKEx will use it to fight against Binance, which has recently listed several very popular modular concept coins.

Third: Oracle. I really can’t bring myself to buy LINK. Recently, there is a PYTH, OK, but it is not listed on Binance yet. It is a bad thing and a good thing. Its market value is also quite high, about 0.4 now.

Fourth: Solana may have a meme with a market value of 10 billion. Solana’s old OGs keep creating various memes. The logic behind this is that they found that memes bring great vitality, and the culture of their entire ecosystem memes is taking shape.

Q4: With only 100,000 U, which coins can help you get back to the top and achieve the “100 million small goal”?

Zhang Xiaoyu: Putting aside these 100,000 U, if you have no money or very little money now, what can you do?

First, airdrops, arbitrage, and new listings. Small costs for big returns.

Second, we can observe relatively cheap things in the main narrative, low market value, and projects with high multiple potential. However, we need to dig up information and enter early.

Third, another part is allocated to some mainstream currencies to obtain some market beta returns.

Fourth: Don’t play with contracts.

Haotian: 20,000 U for Zhang teacher to be a consultant, 80,000 for dayu teacher to operate. (laughs)

Just kidding, a lot of what I said are biased views on trends, which may lag behind when it comes to investment. The trend is there, but it takes time or even happenstance to see it emerge. But when the trend emerges, what are you waiting for? Focus on layout.

If you want to achieve financial freedom with 100,000 U, you must look for trend opportunities.

Sumire Nakamoto: I recommend three wealth codes: Solana, RNDR, and Mobile.

Solana: I vaguely saw the charm of Ethereum back then.

RNDR: It spans multiple tracks including AI and Solana ecology, and is also Apple's VR partner. Pay attention to the dynamics of Apple's subsequent VR devices, and the market will have a hype response.

Mobile: A bit high risk, but potentially high reward. This is the story of US Mobile.

Chen Jian: You must set a goal first and then find the target based on your expectations.

If you want to triple or 5x your money, look for long-term, deterministic tracks, such as games, AI, etc. For a higher multiple, look for coins with low market capitalization, or even coins that are not listed on exchanges, or are listed on small exchanges.

BTCdayu: If you only have 100,000 U. (i) Look at various things every day and absorb as much as possible. (ii) Play with money. (iii) Look for opportunities in areas that you are more familiar with.

I think of the angles for the big opportunities in 24 years. (i) Meme coins. Be sure to hit the target. (ii) NFT. NFT is very unpopular now and has poor liquidity. You can make a lot of money by finding a good target at this time. Some game NFTs can not only increase in value themselves, but also airdrop tokens and props, which is very cool. (iii) Buy popular narrative coins. If the amount of funds is larger, I will look at TIA, for example. Although the price is very high, I think it has an upper limit in the bull market. (iv) Buy popular chains. For example, SOL, I think it may become a chain that competes with Ethereum.

Disclaimer: The market is risky, so be cautious when investing. This article only represents the views of the interviewees and does not constitute investment advice. Users should consider whether any opinions, views or conclusions in this article are suitable for their specific circumstances. Invest at your own risk.