The Survival Path of Crypto Investors: The Loser's Game, Surviving is the Key

Author: degenspartan, eGirl Capital

Source: eGirl Capital official website

Compiled by: TechFlowGPT

Charles D Ellis (a seasoned investment expert still alive today) classifies modern (traditional financial) investing as a "loser’s game" (I agree with this perspective).

Games can be categorized into two types:

• Winner’s Game: Victory is determined by exceptional skills that exceed expectations.

• Loser’s Game: Victory is determined merely by making fewer mistakes than other players.

In the early days, cryptocurrency was a winner’s game—participating and winning required above-average technical knowledge.

Today, I believe cryptocurrency has largely evolved into a loser’s game—merely surviving is enough to win.

(This is not a binary turning point, but rather a change that has occurred since 2020 as the participation of professional players has gradually increased.)

But note: whether in cryptocurrency, traditional financial markets, or most things in life, there will always be winners and losers.

Take the meme coin craze (a manifestation of speculative behavior in this cycle) as an example. To win, you might need some technical knowledge, an understanding of smart contracts, monitoring liquidity pools, and perhaps a charming following on Twitter so you can sell when you have liquidity to exit.

Winning is winning, regardless of whether you cross legal or moral boundaries. I wouldn’t say it’s right, but I do acknowledge it’s a way (recognition does not equal endorsement).

If your sense of justice starts to burn, then let me warmly welcome you to the crypto world. If you can make money in an unpermissioned way, you can damn well lose money in the same way; the Lazarus Group (North Korean hackers) says hello. From the perspective of a loser’s game, you "win" because you don’t participate at all, knowing you have no significant and lasting advantage to truly succeed.

Meme coins are a zero-sum (or possibly negative-sum) game, but that doesn’t mean no one can make money. Certainly, some people are making money; the question is, are you one of them? There’s an old saying: if you can’t spot the sucker at the poker table, then the sucker is probably you, which seems quite fitting here.

Another case, winners in a winner’s game:

As a degen, I personally participated in the crazy front lines of "Food Farming" (note: referring to the DeFi summer), where I was mining those worthless tokens.

My advantage at the time was being soberly aware that these tokens were worthless, thus understanding that holding these tokens long-term or participating in enticing high APR Pool 2 was a suicidal act.

So, as a cautious person, I mined a large amount of soon-to-be worthless tokens from Pool 1 and repeatedly withdrew funds from the liquidity pool until they went to zero.

Winners in the loser’s game are those who didn’t participate in DeFi farming at all and ultimately survived the bull market in 2021, while the competitors self-eliminated.

The Key is Advantage

What I want to say is that in any game, you need an advantage to win.

I know this sounds unfair to ordinary speculators who don’t have a fan base to dump tokens at will, but life is inherently unfair.

The correct response is not to complain about the unfairness to ordinary speculators but to reflect on what to do in reality. Doubling down, digging deeper, and doing "due diligence" so that your trench tactics can give you an advantage? I’m not so sure about that.

Immediately, someone will counter my anti-trench cautious mindset, arguing that I’m high and mighty because I’m already wealthy and no longer need to fight in the trenches for 100x returns.

However, let me remind you clearly that there is on-chain evidence showing I only have 1 Ether, so if anyone needs to fight in the trenches, it should be me, my crypto brothers and sisters.

To some extent, we are all playing a dumping game with each other—everyone is just operating on different time cycles.

How to Gain an Advantage?

So, if you’re not actually a genius, how do you gain an advantage?

Step back and look at the big picture.

You win by choosing to play only the games where you have an advantage and surviving.

Specifically:

Whether the market has peaked or this is just a bear trap (by the way, this is the biggest trap I’ve ever seen) (but at the same time, it won’t trap me), surprisingly, is not that important.

What matters most is your ability to survive, no matter what happens. I think this simply involves reserving enough funds so that you are never forced to sell prematurely or forced to participate in a negative expected value Hunger Games where you have no advantage.

A portfolio consisting only of cash and cryptocurrency, if sized appropriately, will allow you to remain "stupid" longer than most without going bankrupt.

This is my lonely fortress.

(Well, at least that’s my version. The gambler’s version is actually more defensive, as you live off the interest of your portfolio, while my version is about artificially creating a payment that matches your spending by splitting the portfolio into upside risk and defensive funds, which can only last as long as your capital reserves.)

Instead of going 100% into cryptocurrency, why not slightly reduce it, say 90% cryptocurrency and 10% cash? Or any number that suits you, to ensure survival while maintaining exposure to the market.

If the market has peaked—and you hold a lot of cash + other crypto assets—what if the market stagnates for the next four years?

Carefree. You’ll be fine. And most others—might not be.

If this is the biggest bear trap I’ve ever seen (by the way, it won’t trap me), and you hold a lot of cash + other crypto assets, what will you get? Not super amazing returns, but amazing returns.

Play the world’s smallest violin and mourn for being just a billionaire instead of a ten-billionaire.

In short, my point is that the real, tangible advantage you can create for yourself to win is simply not dying.

Survive, and you will slowly notice that the people around you often blow their own heads off (too early to say?).

Those suited individuals with public identities won’t talk about this because they can’t. They don’t have that advantage. They need to write reports, tweet to be thought leaders, underperform against benchmarks, and please investors.

Only individuals like you and me can truly adopt this strategy and leverage this advantage. Sitting in your lonely fortress, telling everyone else to "screw off," doesn’t have to be a last resort—it’s a lifestyle you can choose and enjoy.

The Simple Way to Win

You don’t need to do anything fancy or special to win.

You don’t need leverage, options, perpetual contracts, futures, etc. In fact, you hardly need to understand or do anything at all. Abandon all of that. Enjoy the eternal sunshine of a mindless head.

You just need to avoid doing anything stupid while others are slaughtering each other, financially self-terminating. The weak are eliminated from the group. The strong survive, and we live to see another day.

Just don’t die.

If you survive, you have no choice but to succeed.