Why are many people unable to accept failure? Why are people today afraid of imitation?

Source: Talking Outside the Lines

Yesterday (2.20) the weather was nice, so I went hiking. The ascent was quite smooth, with the goal being the pavilion at the peak. Although there were some winding steps along the way, the clear objective meant I didn't spend too much time, and the whole process was quite casual, stopping to eat and drink along the way.

However, coming down was a different story. Without a fixed destination and choosing to take small paths and wild trails, I lost my sense of direction amidst the trees. Many areas were steep and slippery, resulting in a long struggle before I finally made it down, covered in dirt.

This process is somewhat similar to investing. When a person has a clear goal and knows what they want to do, they can safely reach their target despite experiencing some twists and turns along the way. Moreover, this journey doesn't prevent you from enjoying the scenery; the only issue is the duration of the stay (investment cycle).

But if you lack a clear goal and don't manage your physical capacity, wandering aimlessly can lead to not only potential falls but also a psychological confusion and fear of the unknown. Even if you eventually succeed, you might end up exhausted or thirsty, likely without a good mood or outcome.

Unless you have excellent physical fitness and a spirit of adventure (strong risk tolerance) and enjoy spending more time and energy exploring different things, you might discover unique landscapes that others cannot see.

Returning to the crypto space, whether investing or speculating in this field, the biggest opportunities often arise from uncertainty. However, based on personal position management and risk preference, executing your trading discipline often outweighs so-called personal talent or self-proclaimed genius.

The reality is that many people seem to have understood these principles but still struggle with investing. What could be the reason behind this?

There could be many reasons, but one significant observation I have made is that many people cannot accept failure or effectively review and improve from existing failures.

1. Why can't many people accept failure?

For example, a friend of mine entered the market in March last year (2024) and saw a KOL recommending a meme coin, claiming it was a hundredfold coin, which piqued his interest.

As the saying goes, "A heart in motion cannot be stopped." So, this friend acted immediately, but instead of researching the project further, he recklessly invested hundreds of thousands without understanding it at all.

He then fantasized about easily making tens of millions in a few months…

The outcome was predictable; he bought one of the most representative low-circulation, high-FDV VC coins of this cycle, and coincidentally bought at the peak. After he bought in, it plummeted without looking back, and only after the recent drop of over 80% did he become utterly disappointed and ask me if he should switch positions. What meme coin could he buy to quickly break even?

This example illustrates a typical mindset: making a full investment without preparing for potential losses. When faced with a downturn, he couldn't accept failure and was unwilling (mainly out of reluctance) to cut losses, always hoping to break even tomorrow. The result was a deeper entrapment, enduring continuous losses of capital and psychological torment.

Even during this process, he merely fantasized and waited for a return, without further understanding or researching the project. A year after buying a meme coin he knew nothing about, he remained ignorant of it, leaving him with only: capital loss + psychological suffering.

Here are some investment points or thoughts we can provide regarding this issue:

1) While taking action is key to success, it must be based on a certain strategy. If the initial direction is wrong and one is not good at reviewing and summarizing, blindly persisting in errors will only lead to more mistakes.

2) Every mistake can be an opportunity to improve, so it's essential to recognize and face past failures reasonably. We shouldn't get stuck in the past; instead, we should focus on the current market.

3) We should use "probability" to think about problems, rather than always chasing 100% certainty. When what you're doing is correct, maximize your benefits; when you find that what you're doing is wrong, minimize your losses.

4) While simple operations are the best, it doesn't mean that one can just go all in and expect miracles. Whether it's the position allocation rules we shared in previous articles, such as 8:1:1, 6:3:1, 5:3:2 (i.e., 50% Bitcoin, 30% altcoins, 20% liquid funds), or the repeated batch trading approach (i.e., buying and selling in batches), these need to be reasonably planned based on personal capital size and risk preference.

5) If you can't understand the current market trend or a specific project, the best trade is actually no trade.

6) History is often similar; sometimes, seeking the sword by carving the boat can achieve some goals, but that doesn't mean you should force it. The market is always changing, and we need to adapt accordingly. For example, when I started dollar-cost averaging in this cycle in 2022, my initial planned allocation was 7:2:1, but by November 2023, I decided to adjust it to 8:1:1 (80% Bitcoin, 10% altcoins, 10% liquid funds). I shared this adjustment in a previous article (February 5). Similarly, regarding altcoins, my initial plan was to start gradually liquidating when TOTAL2 reached $2 trillion, but in recent discussions about altcoins, I've shared my adjustment considerations.

7) If you're not a professional trader, it's best not to trade too frequently. More trades don't necessarily mean better results. Also, avoid what you don't understand, don't use leverage, and don't trade contracts (short/long).

8) We should adapt to the market rather than expect the market to adapt to us. Don't harbor resentment towards the market; ignoring emotions and biases may allow you to see new opportunities before others.

9) The core logic of investing should be to grasp (predict) where market funds and emotions' "attention" will go, rather than being limited to current positions and prices. For example, if you firmly believe that Bitcoin's price will rise to $300,000 in five years, then Bitcoin at $90,000 is not expensive.

10) Speculation has its way of playing, and investment has its way too. You can buy 100 different tokens, investing only $200 in each, or you can directly invest $20,000 in two tokens. Trading strategies need to consider both the trading scale and strategy; if a good investment strategy doesn't correspond to a good scale, the investment won't succeed. For instance, if you're still hoping to get rich by holding $1,000 worth of Bitcoin, the probability of failure is high.

Additionally, the most important point: it doesn't mean that a bear market will always result in losses, and a bull market will always lead to profits. If you can't clarify this relationship, it's better to forget about bull or bear markets; the market only has upward, downward, and sideways movements.

2. Why are many people currently afraid of altcoins?

Recently, there hasn't been much worth noting in terms of popular narratives and stories. Many of last year's popular narratives have performed quite poorly this year. As shown in the image below.

Additionally, through recent observations in groups and on Chinese social media platforms, I've noticed that many people seem to have reached a relative peak of fear regarding altcoins. Some KOLs have even publicly announced that they cleared out all their altcoins at last December's peak and are now urging everyone to do the same, as the bear market has begun.

There are all sorts of opinions out there; some KOLs say: the bull market has just begun. Others say: we are already at the tail end of the bull market. Some even claim: we have entered the early stages of a bear market…

See, everyone has their own different viewpoints, and it seems that each person's perspective can provide some convincing reasons. If you constantly trade based on others' various statements and your trading strategy is often inconsistent, then occasional profits can only be attributed to luck, while losses will be the ultimate outcome.

In fact, if we count from January 2023, this bull market has already lasted over two years. Even disregarding Bitcoin, we have experienced several small peaks in altcoins over these two years, such as the BRC20 narrative, MemeCoin narrative, AI narrative, etc.

So, altcoins have indeed risen before; it's just that they haven't risen in the way you hoped. Many people still cling to the historical fantasy of all altcoins soaring together, but the issues facing altcoins in this cycle have been discussed in previous articles. Simply put, regarding quantity, if the market still had only a few thousand altcoins, there would certainly be a high probability of a "thousand coins soaring" season. However, the market now has at least tens of millions of altcoins; unless there is sufficient liquidity to support it, they simply cannot soar together. At most, only certain sectors may experience rapid fluctuations. In other words, perhaps it's just that you (representing 99% of people) haven't made money, which leads to fear and anxiety, but that doesn't mean others (representing 1% of people) will feel the same.

To illustrate further, in a small, enclosed space, as more people gather, the air (altcoins) naturally becomes more valuable. But now, everyone is openly running around on the vast prairie, and the air has become so abundant that it’s no longer valuable. Instead, everyone is scrambling to grab the already scarce resources, and even the President of the United States has joined in. After a while, the sheep will naturally develop a fear of altcoins: those who are trapped will think about breaking even, those who are watching will hesitate to act, and those who dare to act will get trapped, seemingly forming a closed loop of "not being able to rise."

Another specific example: in just the past few months, with the help of platforms like Pumpfun, at least several million low-cost new MemeCoins have quickly flooded into the already illiquid market, making the crypto market resemble a PvP casino where everyone can be both the harvester (one-click token issuance) and the harvested. As a result, after a round of PK, TRUMP has dropped 77% from its historical peak, MELANIA has dropped 91%, LIBRA has dropped 80%… A few insiders have treated the crypto space as an ATM, easily harvesting at least hundreds of millions of dollars from retail investors. This not only represents a liquidity plunder for the market but also a significant blow to market sentiment.

Moreover, a few days ago, a friend messaged me saying: he bought several projects I introduced in previous articles, and after buying, they kept falling. Luckily, he got out quickly; otherwise, he would have been severely impacted, and he sent me screenshots of the price trends of several projects.

I took a look, and wow, they indeed fell hard. For example:

OLAS (Autonolas)

The OLAS token was officially launched on July 12, 2023. I first introduced it in my article on September 29, 2023. However, from the price trend, it has been falling since February last year, with a maximum drop of about 93%, which is truly disheartening. As shown in the image below.

FUEL

I first introduced the FUEL project in my article on December 26, 2022. In September of the same year, the project raised $80 million, and the token was officially launched on December 19, 2024. However, from its launch to now, it has seen a maximum drop of about 88%. Although it seems better than OLAS, the price trend is even more disheartening. As shown in the image below.

I roughly reviewed that during the bear market from 2022 to 2023, Talking Outside the Lines introduced (including mentions) at least over 1,000 projects in articles. Then I randomly checked some projects that had received VC funding to see their price trends and found that many of them are currently in a dismal state. I continued to manually compile the price fluctuations of the projects introduced in my articles from January 2023, and as of the writing of this article (February 21, 2025), their price changes from the highest price are shown in the image below.

Anyone who looks at the declines in the above image will likely feel fear. When prices rise, they don't all rise together; when they fall, they all plummet. If someone bought these projects in January 2023 and held on until today, the losses would be severe. Among the projects listed in the image, I personally bought two altcoins, FET and ARB, which I detailed in my article on January 1 this year. Since I took profits (selling half my position when the price doubled), I haven't experienced any losses in altcoins.

In summary, the current altcoin market has indeed left many people in despair and fear. This aligns with the viewpoint we shared in previous articles: one of the most effective ways to overcome fear in altcoins is to strictly set stop-loss and take-profit plans, avoiding long-term relationships with any altcoins.

Or as mentioned in previous articles: I only set stop-losses when hoarding BTC. For any altcoin I decide to buy, if it drops more than 20% during the holding period, I will directly stop-loss and liquidate, and I won't consider buying that altcoin again.

3. Is there still hope for altcoins to rise this year?

This is also a question I've received quite a few messages about recently, as I've noticed that the proportion of people trapped in altcoins is higher than I expected.

A few days ago, a friend messaged me saying: "Big Dragon, can you post more articles about altcoin seasons to give everyone some confidence?"

I was actually a bit silent upon seeing this message because confidence isn't given like that. First of all, we've already written quite a bit about the topic of altcoin seasons. Secondly, if I could just post a few articles "bullish" on altcoins and the market would usher in the anticipated "thousand coins soaring" altcoin season, I would be very willing to post such articles every day, but unfortunately, the market doesn't listen to my commands.

If everyone likes to hear good news, then as a blogger, I might say: we may see a wave of new altcoin rising opportunities in the second quarter of this year.

To support my optimistic viewpoint, I can even provide you with some bullish reasons, including:

1/ We are experiencing the best macro policies for crypto ever, with more and more institutions starting to participate in cryptocurrencies (as of the fourth quarter of 2024, there are 1,573 institutions holding Bitcoin long-term, including banks, hedge funds, RIAs, family offices, sovereign wealth funds, and other asset management companies), some friendly regulations for cryptocurrencies expected to be introduced, and more altcoin ETFs likely to be approved this year (expectations for SOL, XRP, LTC, DOGE), and ETH ETFs possibly increasing staking features, along with expectations for Bitcoin as a national strategic reserve (mainly referring to the U.S.)… All these will bring more liquidity to the market.

2/ The number of active users on Pumpfun has dropped to its lowest level this year; people are fatigued with MemeCoins, and attention is shifting back to narratives that seem more valuable and visionary, such as RWA and DeFi.

3/ The current Speculative Sentiment Index (the percentage of altcoins with a 90-day return higher than Bitcoin) is at 23%, indicating that more people are starting to surrender, which means there could be greater investment opportunities in altcoins. As shown in the image below.

4/ In terms of the macro economy, there are still potential expectations for interest rate cuts this year, and global liquidity is currently in a phase of increase. As shown in the image below.

Of course, besides the bullish sentiments mentioned above, I can also list some bearish reasons, such as:

1/ Driven by Trump's presidency and potential favorable policies for crypto, the crypto market reached a historical record of $3.7 trillion last December (which may not include some on-chain data), indicating that the market has entered a phase of high-risk territory. As shown in the image below.

2/ Currently, Bitcoin's performance still outshines major altcoins, suggesting that investment is concentrated in Bitcoin, and funds are temporarily unwilling to leave it (including ETFs) to speculate on altcoins.

3/ Some analysts indicate that over 90% of Bitcoin holders are currently in profit, which, based on historical experience, usually signifies a peak in Bitcoin prices.

4/ With Bitcoin breaking the $100,000 barrier and President Trump issuing coins, more and more people around me are discussing cryptocurrencies, public interest (including a large influx of new, inexperienced investors entering the market) and increased media coverage, and various celebrities or opinion leaders starting to issue coins, this generally indicates that the market is at a peak.

In summary, regardless of the reasons from any angle, when a person wants to be bullish, they can always find various reasons to support that view. Similarly, when someone wants to be bearish, they can also find various reasons to justify that stance. When the market is in a FOMO state, many bloggers and KOLs like to create bullish topics to attract traffic and attention (generally, contrarian views don't get much attention and can easily lead to criticism). Conversely, when the market is pessimistic, they often create bearish topics (or present a perfect escape strategy) to continue attracting traffic and attention.

As for whether there is still hope for altcoins to rise this year? No one can accurately predict market trends. My personal view, which I reiterated in the previous article (February 18), will not be repeated here. The corresponding conclusion is based not only on some reasons or influencing factors I see but also largely on one's own positions and preferences.

Additionally, I've recently noticed an interesting phenomenon: many Chinese KOLs seem to have turned bearish. They either perfectly escaped the peak and are now left with only Bitcoin or a few other coins, or they have already shifted to the stock/gold market and are thriving again. Meanwhile, many foreign (mainly English-speaking) KOLs still seem optimistic about a new altcoin season occurring in the second or third quarter of this year (though not the "thousand coins soaring" type from the last bull market, this view is almost universally agreed upon by both Chinese and foreign KOLs). So, what do you think? What reasons do you give yourself?

In short, you can freely predict market rises and falls, but it's best not to base your trading actions on such arbitrary predictions. Investing is not about directly betting on outcomes. In fact, whether a person is optimistic or pessimistic is often determined by their positions and risk preferences. Instead of relying entirely on others' words to comfort yourself, it's better to optimize your trading strategy and strictly adhere to your trading discipline.

4. Finally, let's take a brief look at some recent noteworthy or interesting events:

- Progress on FTX creditor repayment plan

This week, FTX has begun repaying $1.2 billion to 162,000 users with claims under $50,000, as part of its bankruptcy compensation plan. Claims over $50,000 are expected to begin on April 11, 2025, with a payment deadline of May 30. The happiest recipients are likely those who held ETH, which, from a certain perspective, seems somewhat amusing, as shown in the image below.

- Further expectations for ETH ETF to increase staking features

This week, the SEC acknowledged the 19b-4 filing submitted by Cboe BZX on behalf of 21Shares. In simple terms, this means the SEC has recognized the proposal by 21Shares to allow staking for the Ethereum ETF (note that this is just a proposal). If this proposal is ultimately approved, it would mean that the ETH ETF could earn additional returns from its ETH holdings and distribute those returns to investors. Theoretically, if this goes through, it would attract more liquidity, and ETH would likely take off.

- Sonic's impressive performance

Sonic (S), formerly known as Fantom (FTM), has seemingly performed well since its name change, especially over the past month, with its TVL increasing by over 200%. As shown in the image below.

At the same time, some projects in its ecosystem have also risen alongside it, such as Shadow Exchange (the native DEX on Sonic), which now sees daily fees of $760,000. While the overall volume isn't large, the rapid growth is undeniable. For comparison, the daily fees for Cetus AMM on Sui are $170,000, and for BEX on Berachain, they are $190,000. Interested parties can check more comparative data directly on Defillama.

- Some VC coins starting to lead the shorts?

For a long time, VC coins have been criticized, and many seem to have found a new wealth code: since VC coins always fall, why not short them directly? However, in recent days, the trend seems to have shifted slightly, with some VC coins starting to lead the shorts?

Take Binance as an example; the shorting costs for some tokens' perpetual contracts have rarely increased, and many settlement periods are now 4 hours. Just in the past 24 hours, for the tokens that have been widely discussed, the liquidation scale reached $40.62 million (with $30.26 million from short liquidations), second only to BTC and ETH. As shown in the image below.

As more and more retail investors choose to short, the VCs who have been offloading and harvesting seem to have seen a new opportunity. They can create new volatility through rapid price increases for another round of harvesting. The current market is quite scary, and ordinary users should try to stay away from contracts.