3 Paradoxes That’ll Change The Way You See Crypto Trading/Investing

In this video, I will be talking about the 3 paradoxes about crypto investing that will completely change the way that you view this. Now, after having been in crypto for 5 years, I definitely wish I knew these earlier because they would've allowed me to not only make more money, but just not come out of the first 2 bull runs that I've been in with nothing to show for it. And if you are currently struggling to just make some life-changing money that you have seen other people make through crypto, but you haven't been able to achieve that result, then these paradoxes are going to help you immensely just by changing the way that you view things. Now, before we get into it, hello, my name is Xuan, currently on a mission to create the world's best trading education suite by making trading easy for everyone. But without any further ado, let's just get right into the first paradox. And that paradox is the fact that there is no real use case for 99% of crypto out there. And crypto as a whole is just a very glorified Ponzi scheme. And 99% of all of the crypto that you might ever invest in thinking that it's going to change the world based on its grand vision of decentralizing banking or changing the world of finance as we know it, or to bring whatever use case that you think of and whatever use case these projects are promising you. The fact of the matter is that during a bear market, all of the crypto coins out there, including Bitcoin, will lose 80 to 90% of their valuation. And just to give you proof of that is that let's look at Solana, for instance, one of arguably the highest utility tokens in the world. It's like such an amazing chain. Everyone uses it. So many protocols are built on it and it makes it so Easy for people to send money to each other in a very fast and cheap way, and it's also one of the top performers of the last bull run. In all accounts, this would be considered a blue chip token in the crypto world. And yet, look at what happened after the last bull run: it dropped 98% from the highs. This top tier token with a world class use case and was blue chip dropped 98% of its valuation within the course of like a year throughout the last bear market. Now let's look at another one. For example, Bitcoin is supposed to be digital gold, right? Supposed to revolutionize that we hold gold or whatever, right? Bitcoin is the king of of all crypto. And you know, it has the highest market cap, it has a lot of people invested in it. Boom, still lost 77% of its valuation over the course of a year. Or maybe let's look at Ethereum, for instance. Well, Ethereum is the largest chain in the world with tens of thousands of protocols built on it. I would even go so far as to say that without Ethereum, crypto would not be the same as it is. Because of the existence of this blockchain, it's generated quite literally thousands of jobs for crypto developers, traders, whatever, right? It's just super valuable as a protocol. And yet even this lost 81% of its valuation throughout the last bear market. All I'm trying to say is that a lot of the times when we think about crypto and we try to diversify or we hold these as a long-term investment, like let's be real here, the only reason crypto exists, at least for now, in 10 years' time this could be different. The technology will actually be viable and there'll be an actual use case for crypto changing the world. As it is right now, even in this 2024 bull run, you should only be in crypto to make money. It's just a glorified Ponzi scheme. Coins like meme coins, for example, they are the best examples of coins that have zero use case, like quite literally zero. And the only reason why they are at the valuations that they're at is because of the people that believe in them. It's basically a game of the greater fool to see that who is the last one that buys and holds while everyone else exits. Or a popular game would have it, musical chairs, right? Who's the last one standing when the music stops? That is essentially crypto. And meme coins are not the only example of this. You see this across even on Bitcoin, even on Ethereum. These are just glorified Ponzi schemes. Crypto and you have been misled by some other YouTuber or some other influencers into thinking that, oh wow, you know, this is something that'll revolutionize the world and that this should be like a 5, 10, 20-year hold, you can do that, of course. Like, there's nothing wrong with that, but just be ready to go through periods where you lose 90% of your coin's valuation on paper and then having to wait about 3 years before you see that money even remotely come back. Or there are also instances where you don't even get anywhere close getting to your old valuation, right? Look at Litecoin, for example. It hit its peak back in 2017 and we have not Not gone back to pre-2017 levels since then. Just to give you an idea or to give you a perspective, out of the top 50 coins back in 2017, only 8 of them made it back onto the top 50 list by the end of the 2021 bull market. The thing you need to understand about crypto is that every bull cycle has their own handful of narratives that account for the majority of the gains. And usually these narratives tend to be newer narratives that are only started in that same cycle. For example, this time around, we're seeing the emergence of liquid restaking protocols that are the number 2 Top performing narrative so far this bull run. Now, for example, just to show you what I'm talking about, you can see that throughout this whole bull run so far, or like year to date, the top performing narrative are meme coins, right? By far. Number two, you have liquid restaking protocols. This is very much a new thing that's only been developed during the bear market of like 2022-2023. Then number three, you have real world assets, which is very much a new thing in this bull run. Didn't exist back in 2017. It sure as hell didn't exist back in 2021. Every bull run has its own set of narratives that perform really well. If there is a very high risk that a lot of the coins that you invest in right now and you hold even through the whole bull market and you're like doing this whole patience thing and waiting 5 years, there's still a very high chance that it will never come back to your pre, like past cycle highs. Just look at Litecoin, for example. The high that it made like all time was, yeah, like Binance doesn't even have the data from back from 2017. But let's just say that it is nowhere close to even recovering its 2021 highs because Litecoin is not a hot narrative this time around. At the moment, if your goal is to make money and not lose money and ideally not have to hold through like a 90% retracement, you never see that money come back again. Make sure you have an exit strategy. It doesn't matter how perfect you get or how close you get to the top. All that matters is that you leave the cycle heavier than you came in with. This is definitely a lesson that I had to learn the hard way throughout my first and second bull runs. Like the first one, like I came out negative, which is why I learned this in my second bull run. Even though I wasn't perfect and that I actually left a lot of gains on the table, I was still able to turn $20K to about 7 figures throughout the course of like 2 to 2.5 years. Now, yes, there is some element of patience involved in this. And yes, there is some element of needing to be early to be able to achieve 50x portfolio returns. Even though we're already like halfway through this bull run so far, there are still a lot of gains left on the table. And what's most important is that you have some sort of exit strategy. The key here is that you do not ever want to try to time tops or to try to extract the maximum amount of profits out of every move. That is the worst mistake you can make because at any given point, there's only like 0.1% of people that will actually catch the top or at the bottom. Throughout that whole process, if there is anyone person that will enjoy catching tops and bottoms, it is me. Because I run like a trading education group where I'm also sharing my trades, where I'm also on social media, where I do get a lot of likes if I manage to catch a top or if I catch a bottom. So I definitely remember like earlier on in my trading career, I used to always chase these type of trades where I would snipe the bottom, for example, which don't get me wrong, got me a lot of attention. But was I making money? The answer was a lot less than you think. Because as I was trying to catch these bottoms and tops, I would lose quite a few trades in the process or just miss out on quite a few trades in the process. Like I would, like price would never even come to that bottom, for example, and I would just miss out on it completely. I guess the end of the day, you have to ask yourself, are you trying to get validation, get fame, or are you trying to make money? If the goal is to make money, then a far better, more sustainable solution is to just buy high and sell higher. Because in every bull run, you go exponentially more higher than most people expect. Understand that as long as you have an exit strategy, and it could look as simple as maybe every 50% the price goes up, you will take 25% profit of whatever position size you're at. Or maybe every 2x that it goes up, you will take out 50%, for example, and you just keep doing that. Or maybe you have a set plan. Okay, if it goes 3x, I'll be all out. Or 5x, I'll take half out and I'll take the other half out at 10x. There are of course certain guidelines that you can use to be able to maximize the effectiveness of your profit taking, but that is far too nuanced of a subject for me to discuss in this video. Otherwise it's gonna get way too long. Although if you are interested, this is something that I cover in depth in my education group, which by the way, If you believe that crypto is able to help you make the life-changing amount of gains that you believe is possible and you see with your own eyes, but you cannot for the life of you figure out how to make this work consistently, then feel free to click the first link in the description box below. Don't worry, it's not some $997 course. It's just a website showing you how my service could potentially help you overcome your problems. But only if this is relevant for you and you would like some help fast-tracking the learning curve so that you're not too late in this bull run and you end up leaving this bull run not making any money. It's there whenever you want to check it out. Otherwise, let's get back into the video. One last thing before I do move on to the next point is to definitely like overcome that need for perfectionism. You don't have to take profit at the top. In fact, you can even still take profit as it's coming down, right? It's never too late. Only thing I want you to take away from this, and this is going to serve you really well, all that matters is that you leave this cycle heavier than when you first came in with. And one other very important concept that took me far too long to learn is do not underestimate the power of compounding and cycling your money. You never need to catch the top, right? Never feel the pressure of needing to, okay, if it doesn't do a 10x, then, you know, I'm not making a serious amount Oftentimes you will find that when you cycle your money, like let's say every 50% it goes up, you're like, just cycle your profit into something new and then ride the new wave. Like the money flow in crypto always works in this way, right? From the large caps, like from Bitcoin to the large caps, to the mid caps, to the low caps. But it also flows from narrative to narrative. At every point in the bull cycle, you always have certain narratives that pop off and they have their own time. And if you are able to just cycle your money and then jump into all of these narratives or jump into like vertically jump around, if you do 10 trades that each give you like 20%, for example, you are up way more than just 200%. Because of the power of compounding. Do not underestimate the power of this and how much money you can make just by getting small gains and then cycling it each time. And doing so has the benefit of giving you a higher chance of actually leaving the cycle earlier, like heavier than you came in with, because the amount of bets that you have to play with is just higher, right? Compared to putting your money all in into one coin or 2 coins, for example, and then ending the bull run, seeing them not doing anything. If portfolio allocation is a question that you've always had before, I have made a video on how to allocate your portfolio optimally for maximum gains While minimizing your risk. I will link that video down in the description box below, but I do urge you to finish this video first before you move on to that one, because the other 2 tips are going to help you immensely as well. And the second paradox that will change the game for you is that most of us are thinking way too small when it comes to crypto bull run. What I mean by this, when we think about investing in general, we always think like, oh, if my portfolio does 100%, right? Especially if we're investing into stocks or some traditional finance stuff, or even like investing into mutual funds or like trust funds or whatever, if that Yeah, we get, for example, 30% on the portfolio or God forbid, 50% or 100% gains on the portfolio. That's amazing. That happens once every 10, 20 years. Those same rules don't apply to crypto because crypto is a whole different beast. Traditional finance is like, that's where the little boys play. Crypto is where the big boys play, right? In crypto, the mistake that most people make and just cutting themselves short of all the life-changing profits that they could have made, it's the fact that we're thinking too small. Think back to your career, for instance, and just think back to how many points have you taken profit way too early on? Maybe let's let's say you took profit at 50% gains or even 200% gains just to see that coin go up by another 10x to 20x. If you've been in a situation like that, the solution to this is very simple. It's just to think in terms of one order of magnitude higher. Instead of capping like your maximum potential reward at 2x, think 20x. Because in crypto, moves are so exponential that it becomes like illogical, right? It doesn't make sense. Like things can go up like 20, 30x throughout the course of 2, 3 weeks. It doesn't make sense, but it doesn't need to. Because crypto is a fundamentally irrational market. And the more we try to go about crypto in a very rational way, in a way that makes sense, that's where we actually shoot ourselves in the foot. I'm sure you guys have heard of stories of these 15-year-old kids that don't know, like don't even know how money works. They can get like a 100x return while you're here stuck at like 50%. And there are countless stories of this where really low IQ degen plays outperform the markets. And it's because they're not overthinking this. Crypto is irrational. And let it be. Play the game following the rules of this game. And crypto has different rules compared to the traditional markets. And the last paradox that will completely change the game for you, that is the idea that you are never too late to jump into a crypto. How many times have you caught yourself not wanting to get into a coin because it's already pumped, for example, 50% or even 100%, and you think you're way too late? And then that coin continues to move another 5x or even another 10x. If you've been in a situation like that before, understand that not only are these pumps really high in order and magnitude, but they also take A lot longer, or rather they also last a lot longer than you think. You already know about the order of magnitude higher in terms of 100%. Think in terms of 1,000%. But now let's talk about the timing aspect of it. A general rule of thumb that you can follow when it comes into tracking these macro movements, because let's face it, if a coin is going to go 10x, more likely than not, it's going to take at least a month or a couple months. As a rule of thumb, most macro movements in any market—crypto, forex, the world in general—follows a What we like to call a seasonal tendency, or they tend to take a quarter to play out. By quarter, I mean three months. If you track just any major move in crypto, and I will show this to you, like for example, let's use Solana. You will come to realize that most moves take anywhere between 60 to 120 days, right? It's basically 90 days, like plus minus 30 days. So for example, you can see that this consolidation here lasted for 180 days, which is two quarters. This retracement here lasted for 60 days, which is also 90 days, like a quarter minus 30. And then the next pump, right? The following pump lasted for 90 days. Exactly, and it went up by six x. And then that retracement was pretty short one. But then after that, you had a two x over the next sixty days. You could have even argued that the market was in an uptrend for a hundred eighty days before right now going through a retracement period so far of about sixty days. Understanding that most macro movements take this amount of time, and that most coins outside of a large cap in this case, like Solana is pretty large cap, so it's normal that it's only pumped six x or even two x. If you're working with anything that's like a mid cap or even a low cap, then no, you're dealing with ten x to twenty x numbers. So understanding. Understanding these 2 factors really helps you out a lot in the sense that the next time you find yourself seeing a coin pump like 200%, but it's only done so, let's say over the course of a week, well then you know that you're probably not too late because even at the shortest time, this could take easily 2 months. That's just something that should hopefully give you a little bit more comfort in jumping into the trend while it's still going up. Now, the second big misconception that I do want to address that will help you with this mindset is the idea that just like how I mentioned earlier, that in every bull run, there are a handful of narratives that just completely outperform the markets and are responsible for the majority of the gains that are realized in that bull market. The fact of the matter is that outperformers become the outperformers for a reason, either because the market believes in it or some really smart people are buying into it, or maybe the market makers are manipulating the markets, whatever it is. Now, just to give you an example, let's take a look back at meme coins. Those of you who have been following this bull cycle closely, you know that throughout the first 3 months of this year, meme coins like as a whole went up by like 10x to 20x. And over the last couple months, like I'm recording this at the moment in So from March to now, the market has gone through somewhat of a very significant retracement. Altcoins as a whole has gone down by between 50% to 70%. If you have been following this cycle closely, or like this portion of the cycle closely, you would've remembered a lot of people writing off meme coins as a good investment because the argument was that it's already pumped by 10x to 20x and most of the gains have already been realized, so it cannot continue going higher. Guess what? But meme coins have been the strongest performing asset class. Now, just to give you an idea of what I mean, let's take a look at WIF. Now coming out of this retracement, it's already gone up by like what, 70%? If you look at, for example, even Pepe, you can see that barely even went down for a retracement. And you look at Bome, barely went through any sort of retracement. Let's look at Bonk, for example, this Solana meme coin. Boom, right? Super strong. Even real-world assets, right? Real-world assets have been the number 2 performing asset class, or rather number 3 highest performing asset class throughout this bull run. Look at this, right? Barely went for any sort of retracement. It just remained Really strong, while literally the rest of the market, no matter how good your fundamentals was, 50 to 70 percent. In Avax's case, it was 50 percent. If you look at Solana, which was also one of the strongest coins throughout this whole bull run, boom! That's 44 percent. And so far, the gains been nothing comparable to the top performing narratives of this bull run, which is real world assets, liquidity staking protocols, as well as meme coins. So outperformers tend to remain outperformers for longer than you think. So do not sleep on them. If this coin is pumping, it's actually a good thing. The fact that it's performing this strongly means that there's a reason behind it, and that it's. More likely to perform really strong. The mistake that most people tend to make, you have probably made this mistake before, I know I have, is that you see a narrative like already pumping a lot and again, you just feel like you're too late and then you start looking for the catch-up play, right? Oh, you know, gaming hasn't pumped yet. Oh, AI hasn't pumped yet. And you start allocating money into those other narratives just to finish the bull market, realizing that, oh, you know, AI only went up by 50%, whereas meme coins, for example, went up by another 500% from the point where I thought it was too late. So just understand that in any bull market, don't overthink it, right? If something's performing well, It's never a bad idea to just jump into it. One thing that you do need to understand about the financial markets in general is that it's not a supermarket. If you go into a supermarket right now and you saw an apple on sale for like $200, for example, you shouldn't buy it. Like I wouldn't buy it. And the reason for that is because it's expensive relative to market value. But the markets don't work the same way, right? The financial market. There is no such concept as expensive or cheap. There is only uptrend or there's only downtrend. And as long as the market continues to go in an uptrend, which is the case usually in a bull run, then you just continue to buy high and to sell even higher. If the market is continuing to go in a downtrend, it doesn't matter how cheap you think it is, or like, oh, this coin's already went for an 80% retracement. Doesn't matter. It can go another 80% down from that point, especially in a market like crypto. It's just a glorified Ponzi scheme. Understand that in a downtrend, for example, you sell low and you buy lower. And if you are able to rewire your mind to work in this way where you're not overthinking every little move and trying to apply logical reasoning into a fundamentally irrational sector, Then you're going to do pretty well. Anyways, if you do enjoy this video, drop a like. It does really make my day. If you want to see more content just like this, then make sure you subscribe. And if you want to see me make a video on a topic you would like covered, drop it down in the comment section below. But otherwise, I'm going to link that video to that portfolio allocation strategy for you here, and I'll see you guys there. Cheers.