I’d be more cautious here: 10 year and 10 hour thinking only.
We like all kinds of coins. We like them for both the long and short term; it's currently in the middle, which can reach its "crash position." "What position will it crash?" sounds like a good question. Only by enduring the crypto winter can you truly understand it.
When the crypto winter arrives, many people will lose faith, unable to endure years of mental torment. You can hear all sorts of negativity:
"The government might actually regulate this."
"These products are too premature right now."
"I told you it was a bubble."
Besides eating into large book (or actual) losses, you'll also see people breaking down, going bankrupt due to over-leveraging (or poor tax planning), exiting potentially promising projects, becoming hateful, depressed, or indifferent, and generally ignoring the long-term potential of Crypto.
Worse still, the next bear market will be a regulatory nightmare, and we won't have the bull market atmosphere to help protect us from all impacts, including:
Consumer protection
Fraud and abuse
Systemic risk
ESG (Environmental/环境、Social/社会 and Governance/治理 abbreviation)
Our enemies will input FUD (Fear, Uncertainty, Doubt, originally referring to IBM salespeople instilling negative notions about competitors' products into customers’ minds, making them believe they have no other choice but IBM’s products) regarding illegal activities.
Meanwhile, the "grassroots" crypto community will become sparse because when you lose 90% of your savings and need to find a real job again, it becomes more difficult to make a comeback.
It sounds harsh, indeed severe, but perhaps this time it won’t be that bad.
After the crash, the first priority is to go back to the previous chapter (yesterday's translation of 1-6, How High Can We Fly), and determine if you still believe these arguments are correct:
Is the centralized world still collapsing?
Is web3 making an optimistic bet on the future?
Are the building blocks of the new frontier (Bridge, DAO, NFT) still worth significant investment before the next cycle?
Is it easier to find fundamentally strong projects in the next downward cycle?
Is there still enough funding to support all interesting things?
Do you still believe the high watermark can span a 5 - 10 year time dimension?
If you still have confidence, put on your helmet, embrace the cold, and pay attention to these winter survival tips:
Remove leverage early.
If you're not a professional trader, your leverage just makes you fodder for professional traders.
Crypto is volatile enough and still has plenty of room to rise.
You don't need to push your luck here and destroy your entire personal balance sheet.
Settle tax obligations in time.
Most people know they shouldn't take on credit card debt to buy dogecoin, but will completely ignore the "leverage" they're taking on.
Not planning to sell what they must pay taxes on by the end of the year.
If you started with $10,000 on January 1, 2021, and it swelled to $100,000 through active trading by December 31, only to fall to $25,000 on January 1, 2022, then you owe the government more than you own.
Plan your taxes well, otherwise you'll only leave quietly.
Don't try to predict when the peak is and short it.
Don't short. Don't short. Don't short.
Even if you're right, you're very likely to misjudge the timing and liquidate yourself.
When you lose, everyone will celebrate your death, profit from you, and dance on your grave; it will make you sad.
Even if you win, no one will like you, and in the long run, you will definitely lose.
We don't set the rules, but we still remind everyone.
For those who double down, they think, "Wow, this will be great. I can't wait to buy discounted coins in the next bear market." Bear markets always go lower than you imagine and last longer than you expect. Meme trading and reflexivity are addictive drugs. When the music stops, you'll see painful interruptions, and wounds take time to heal.
If you're a young team managing token finances or a balance sheet for the first time, do everything you can to protect yourself and your team from black swan events. Many teams are idiots with their finances and fail at the most important capital management work: "Don't mess up the money." (This is Messari's safety advice.)
If you're an aspiring Web3 employee, developing indispensable products at companies with substantial funds is a good choice.
The crowd that got rich overnight will slowly disappear, but the unicorns of the next cycle will be built in the gloom of the crypto winter. Crypto success boils down to endurance. "We will all succeed" is an interesting bull market meme, but more importantly, being able to shout "We will survive!" when everyone is laughing at you, the market has dropped 80%, competitors have gone bankrupt, and customers have cooled off. Before signing up, ask recruiters if their company has enough cash on hand to survive the bear market. (This point should already be a consensus for many.)
2020 was a good time to go All in on crypto; that time has passed, and now you may need to think further ahead, like ten years, and also consider the present more, like 10 hours.