30 Trading Insights from Legendary Trader GCR
Besides making money, don't overthink.Author: VIKTOR
Compiled by: Peng SUN, Foresight News
GCR is an anonymous trader who rose to fame during the 2021 bull market due to his apparent mastery of trading trends. As a renowned short-seller with a massive trading scale, his trading cases are impressive; for example, he publicly shorted DOGE at its peak in May 2021, shorted SHIB and metaverse tokens during the bull market peak in November 2021, and publicly shorted LUNA before its collapse in 2022 (he made a $10 million bet with Do Kwon). Although he now speaks much less frequently on social media than during the last bull market, we can still read his past tweets. This article compiles some of them, many of which contain valuable insights worth saving and revisiting.
Before reading GCR's tweets, I summarized some key learnings from his insights:
- Integer thresholds are Schelling points, which can be potential support or resistance levels, especially in the absence of valuation reasons.
- Low unit bias can attract retail investors: when you have millions of dogcoins (… which is 10,000 times $1), why would you buy less than one-tenth of a Bitcoin?
- Do not short low market cap projects: if GCR follows this rule, you should too.
- The strong get stronger, and vice versa. Selling valuable coins and buying junk coins is a bad strategy; you should avoid it.
- Based on SNL and Musk's performance, shorting every DOGE pump is one of the most successful trades you can make.
- GCR's advantage is not related to candlestick analysis or any complex strategies; he relies solely on intuition.
- New tokens have an advantage over old tokens: they are full of hope and lack holders.
- The way the market reacts to news provides a lot of information about the biases (bullish or bearish) and sentiments of market participants, which is more important than the truthfulness of the news.
- Don't overthink things beyond making money.
- During altcoin cycles, you should maximize risk at the beginning and gradually reduce it, but most people do the opposite.
- Asia/China will drive the next bull market.
- Both BTC and ETH are at the bottom. After the FTX collapse, GCR turned bullish.
- Most long-term believers are better off holding BTC and ETH rather than trading.
- ETH will reach $10,000.
Note: GCR originally tweeted from the @GiganticRebirth account and now uses @GCRClassic, with a few tweets from the temporary account "MingXMecca."
- For a long time, every panic sell caused by DeFi vulnerabilities occurred because the market never really cared beyond a few hours.
When news affects prices, market participants often get tangled up in whether it is true or false. More often than not, the actual truth of the headlines doesn't matter. The market's reaction to the news, and how long that reaction lasts, is more meaningful.
When 95% of traders expect to "sell the news" after the news is confirmed, I almost always buy in, as I have previously stated "inverse sell the news." Many who are forced to exit due to fear of an event are compelled to re-enter. "Selling the news" happens in unexpected situations.
This is why we have never, and will never, short low market cap projects. This is one of the hard rules I teach everyone, especially when sellers are exhausted after four years and supply is in dire straits.
The best traders will always prioritize intuition over delusion (apophenia). Don't like this answer? Is intuition not enough to satisfy your curiosity? This is the truth, and there is no other truth. I can't teach it to you, but you can find the advantage.
No matter how many times they see it, people still underestimate the appeal of the low unit bias effect to retail investors. This is the most attractive aspect of cryptocurrency. Why would any clear-minded person buy 100 CONE, while retail investors hold 1 million? This is the cheapest token on Coinbase.
- Don't overthink things beyond making money
- DOGE is the easiest coin to trade by downplaying catalyst-driven rallies:
Completely detached from this short, you will find that DOGE is the easiest coin to trade. On April 20, DOGE day, Musk's appearance on SNL, and TSLA accepting DOGE payments, I shorted all the tops, and the enthusiasm for the rally never met expectations (a meme token shouldn't strive for fundamentals), likely without a cycle low.
The third most common question I receive is: If you still believe they will go down long-term, why take profits on shorts? If you gain 70-90% downside potential while shorting an altcoin and still hold an extra 10%, please reassess your heuristic. This situation will happen to you if you continue to mimic after my short arguments for months.
There are two ways to short: trading and reverse investing. If the confidence interval for the price over a year is > 95% (the probability that the price will be lower than the current price after a year is 95%), then "invest" and don't focus on short-term fluctuations. I chose to "invest" in PEOPLE at 0.09 USDT; squeezing to ATH is possible, but my investment is in a great company.
Comparing the market cap of NFT projects with some famous meme tokens: SHIBA reached a peak market cap of $60 billion; no NFT has a cap of $1 billion (except BAYC). Relative to the growth of NFTs, altcoin 2.0 seems overvalued; I predict that the tokenization of NFTs will eat into the trading volume of altcoin 2.0.
As expected, rebounding from 10 meme supports, but not entirely meme-based; hard integers are obvious convergence points for reflexive assets with fuzzy valuations; respect Schelling points.
For weeks, I have been telling everyone that the greatest threat to any successful project is its own success. Success breeds imitation, and this is a profit-driven industry that will ruthlessly shift to original derivatives in pursuit of higher returns (from VCs to traders to retail investors).
DeFi Summer, Food Farms, original seigniorage [ESD, DSD], OHM (Olympus DAO), and countless other fads rotate.
In the past year, has there been an easier, more accurate (>100%?) and less complicated trade than shorting Elon Musk stimulating DOGE's rise? A trade that requires less advantage, better foresight, and less talent, but can always be realized? SNL, Dog Day, TSLA payments, Super Bowl ads, space missions, etc.
If I have helped you in the past, please heed my advice: don't try to catch the bottom. You may suffer huge losses thinking you can buy low and recover some losses. This is nearly impossible, and you are likely to panic sell due to losses or see the coin price go to zero.
Capturing (high volatility at both ends) is where you can achieve the best returns, but the market's pricing of these events has gradually become more efficient. However, airdrops still often follow predictable chart patterns that the market has not fully grasped; study every occurrence since 2018.
Mastering the timing of airdrop "bottoms" is actually a very key art form that this field needs to learn; after UNI, I really started to study this issue. Sometimes on-chain indicators are helpful, but this is on exchanges; once the price flattens and starts to consolidate, sellers usually "exhaust" themselves.
If you are not good at trading, try to go all out in building your network. Attend every meeting. Show up at every gathering. In a bear market, humans are easier to approach. You wouldn't believe how many people I know have succeeded by knowing the right people.
Just as "digital gold" became the winning narrative and use case for Bitcoin in the last cycle, the argument for "decentralized casinos" is becoming a consensus across the entire crypto industry (filling the void left by "Web3").
For ordinary people, flying to Macau or Las Vegas is too expensive. When we have windfalls and macro risks, decentralized casinos and/or decentralized Ponzi schemes always run the fastest. I have always believed that humans are desperate, greedy, depraved, lonely, and trapped in the metaverse.
If you find yourself marginalized, I would suggest trading news rather than getting information from others. The competition for news trading is becoming increasingly fierce, so you must build infrastructure for quick responses, observing projects that have been delayed in announcing for months.
The urgency is that if you are trading meme coins, when the market indicates they don't care about the "news" of the meme, you should quickly cut your losing positions. Any trader with an intuitive sense of the market can clearly recognize this catalytic sentiment and should take partial profits at the first impulse.
Traders often contact me to ask why cryptocurrencies show relative strength or weakness compared to stocks. I usually tell them to wait before drawing conclusions; often, we are just witnessing a lagging effect.
Publicly shorting SHIB, DOGE, GAL, SAND, MANA, original Luna, LUNC, and more broadly, the entire cryptocurrency bubble of 2020-2021, and the decade-long macro asset bubble of Q4 2021, etc.
To be honest, due to some "future catalysts," tokens heavily held by retail investors are often hyped for months, leading to explosive buying frenzies as the event approaches. Just when retail investors imagine memes will make them millionaires, market makers exploit the chain reaction of ultimate liquidity to distribute.
What drove XRP to $3? Most importantly, low unit bias. Bitcoin is at $10,000, ETH at $1,000. Retail investors feel they are too late, but can a 10-cent XRP rise to $1? $10? What if it goes to $100? A lot of speculation about an imminent Coinbase listing (incorrect), betting on unit bias in the next cycle.
At the beginning of the altcoin cycle, what truly drives retail development? (1) I was too late to act on "legitimate asset classes" (BTC/ETH); (2) other coins seem institutional (XRP will be used by banks, Garling seems certified, ADA was created by an ETH "co-founder," Musk endorses DOGE).
In the later stages of the cycle, they start chasing those more depraved games that don't require as much social proof (as the retail pool opens). These cycles only begin after major assets have risen significantly, leading to (1) wealth effects; (2) people feeling they missed the opportunity, chasing altcoins.
For most people, it's still too early to consider the next "institutional" coin. Researching during a bear market will give you an advantage, but the real time to invest is after major markets have risen significantly. Sentiment will also shift from cryptocurrencies being a scam to "I need to buy the next ETH; ETH is too high."
Full of hope; lacking holders; the team isn't very wealthy and has no incentive to hype.
I believe that China (and all of Asia) will power the next bull market, which will take quite a long time to digest the West's mockery of this space, but the East is rising and eager to showcase itself. You should browse WeChat; many future high-growth tokens will be unknown in your circle.
- The strong get stronger (MingXMecca):
In the narrative cycle, we have a cognitive bias towards buying tokens that have not yet grown; but more often, the strong get stronger, and the weak tend to lag. Until the dance ends; then the manufactured strength collapses rapidly.
- "Low float theory" (MingXMecca):
Think about the incentives; some projects have huge unpaid floating funds / can be hedged in the future. Let market makers deliberately push up prices, making traders think they should join this "narrative" ------ distribution; rather than selling at zero later in a deep bear market. They have been waiting for GCR's echo.
- Reverse super cycle (MingXMecca):
Web3 has no real changes; people talk about their narratives at the top and bottom. I have always told people that the idea that all tokens will go to zero is just a reverse super cycle, "this time is different." It is always the same game, and people love tokens.
Some of the best-performing tokens have the worst tokenomics, coming from the most predatory teams. Many teams that launched during the peak of the bear market have been desperately waiting for more favorable conditions to deploy tricks and manipulate the market.
Try to imagine your Ponzi scheme as a professional boxer rather than a token; winners take all, losers are out. People will really sell valuable coins and buy junk coins, completely ignoring advice.
We observe the general trading principle when meme coins pump: during the altcoin cycle, you should increase risk at the first trend reversal and gradually start to protect capital over time. People lose money because their approach is exactly the opposite; slow early on, becoming greedier over time.
I continue to hold a large position in spot BTC and ETH because I believe we bottomed in November and remain optimistic about the future; aiming for a $10,000 ETH by 2030. 90% of holders will fare better. This advice is only for Degen traders playing with junk coins.
Having traded altcoin seasons for years, one of the best indicators of how much juice is left is: how do altcoins react to news, announcements, listings, and fraud? When an altcoin season is about to rug, traders are still bullish on news but will sell immediately.
I bought tokens around 16,000-18,000 in 2022, with little interest in trading. I plan to throw them to institutions/TradFi funds in the late stages of the next cycle. I have scaled up some reverse investments, selecting some narrative/rotation that has already exhausted its potential junk coins.
Don't expect too much; the entire banking system won't collapse overnight, nor will it lead to hyper-bitcoinization and push BTC to $1 million overnight. Also, don't expect too little; when we get corrections, this is not a scam designed by CZ to exit liquidity, but a return to zero. Stay balanced. Study 2019 and 2020.
This may be my last tweet about cryptocurrency. As I often say, if you have a long-term belief in BTC and ETH, then just hold them without trading, and you will have good returns. They will just keep printing more money; you are unlikely to catch every local move. ETH will one day reach $10,000.
