1. Leverage: I used 20x leverage and lost a down payment overnight
In 2020, I personally experienced the backlash of leverage. At that time, Bitcoin surged, and I entered the market with a 20x leverage position, making a floating profit of 520,000 in one day, and I instantly felt like I had 'understood the way.' As a result, a wave of negative news hit, and BTC plummeted by 12% in a single day, causing my account to go to zero within two hours, along with my margin disappearing into thin air. This experience felt like a roller coaster directly plummeting off a cliff.
Blood and Tears Summary:
Leverage limit of 3x, single position ≤5%: This is the iron rule between my cousin and me. Even when facing extreme volatility (like the BSC chain MEME coin blood-sucking market in Q2 2025), the account can withstand the drawdown.
The real cost of leverage is 'possibility': even with a 90% win rate, one black swan event can wipe everything out. For example, in 2025, a political MEME coin's market cap soared to $12 billion before crashing 40%, leaving high-leverage players with negative balances.
2. Asset Allocation: 85% in mainstream coins as a base, 15% as 'lottery'
I once blindly believed in 'hundred-fold altcoins', heavily investing in an NFT project claiming to be a 'metaverse toilet', with my account once peaking at 1.86 million. But after the project team fled, my 300,000 principal vanished. Later, I realized that 80% of profits in a bull market actually come from BTC and ETH fluctuations, with altcoins merely adding icing on the cake.
My allocation plan (2025 optimized version):
Core Position (85%): Bitcoin (70%) + Ethereum (15%). The former serves as a risk-hedging anchor (dominant position 42.1%), while the latter benefits from the Layer2 ecosystem explosion (e.g., Arbitrum TVL accounts for 72% of Layer2).
Satellite Position (15%): Diversified into Layer2 (e.g., ARB), AI blockchain (e.g., Bittensor), RWA (e.g., Ondo) and other high-potential sectors, with a maximum position of ≤5% for any single project.
Why is it effective? Data from 2025 shows that Bitcoin's bear market drawdown is 40% lower than that of altcoins, while mainstream Layer2 projects can achieve an annualized compound growth rate of 25%-30%.
3. Stop-loss: 8% liquidation line, hesitation leads to defeat
The hardest lesson was when ETH dropped from $1,800 to $1,200 in 2022. I kept 'averaging down', and as a result, my losses expanded to 70%. Now, my cousin and I strictly adhere to an 8% stop-loss line—if it breaks, we cut our losses immediately, never holding on.
The data logic behind stop-loss:
The volatility in the crypto market often exceeds 20%, but after a single-day drop of 10%, the probability of further declines reaches as high as 68% (referring to Q3 2025 altcoin data).
Institutions often use the 'risk-reward ratio of 1:3' principle: risking 1 unit to gain 3 units. For example, if the stop-loss is set at 8%, the profit target should be at least 24%.
Conclusion: Surviving is the hard truth
There are no myths in the crypto market, only 'survivorship bias'. My cousin turned a 10,000 principal into 500,000 in three months, not by gambling, but through disciplined investing + stop-loss + mainstream coin stability. For instance, he invested 500 RMB in BTC weekly, and after 6 months, his cost was diluted to below 90% of the market average.
Finally, I want to share a quote: 'Price charts may repeat, but human nature does not change. What can make you money is never the fantasy of getting rich overnight, but the confidence to survive in a bear market.' Follow Xiang Ge for more firsthand information and accurate insights into the crypto world, become your guide in the crypto space, and remember that learning is your greatest wealth!#ETH走势分析 #加密市场观察 $ETH
