The way to get rich quickly is hard to replicate, but the reasons for failure are mostly similar.

Written by: Ice Frog

At that time, I was still too young, not knowing that all the gifts fate bestows have already been secretly priced ———— Stefan Zweig

1. The Casino Theory of Cryptocurrency: Luck or Skill, the Path to Success is Not About Difficulty

Any game, whether it is gambling or not, ultimately has to prove a fundamental question: Is this a "game of luck" or a "game of skill"? Undoubtedly, in the early days of the cryptocurrency world, luck played a major role; as long as you dared to take the plunge, you could win. The cryptocurrency world rewarded early brave explorers handsomely. As the industry has developed, we still see wealth myths in the cryptocurrency space erupting from time to time, but the opportunities for victory brought solely by luck are becoming increasingly rare. We have seen countless stories of overnight riches, but we have also witnessed many tragedies of instant losses.

The importance of luck lies in the opportunities it provides, while the importance of skill lies in its ability to convert those opportunities into wealth. From the current standpoint, for retail investors, we must acknowledge that luck still exists in the cryptocurrency world, but we must also recognize that the importance of skill is increasingly significant.

What is the ultimate skill for winning in the cryptocurrency world? Different people have different opinions; some believe it is the invincible king of short-term K-lines, while others think it is the value investment king who dares to hold large positions for the long term. However, in terms of final win rates, both strategies have their champions, but they also have ordinary players who end up in disastrous defeats.

If we look at it from the perspective of an ordinary retail investor like myself, for the majority in the market, it is essential to remember: embracing low-difficulty investments is the only secret to winning. Note the limiting qualifiers: ordinary people and ordinary retail investors.

For diamond hands and short-term FOMO paper hands, achieving ultimate victory undoubtedly involves considerable difficulty.

2. The Survivor Bias of Diamond Hands: If You Can, Then Go; If You Can't, Don't Force It

Before discussing diamond hands, we must assume a truly ordinary Web3 surfer, who, apart from being bold, has no significant talent, has only a mediocre understanding of K-lines, cannot hold long positions, feels anxious watching others get rich, and is a typical retail investor who loses when they jump in. Next, we will further discuss the probability of ordinary people becoming diamond hands, so you can completely give up hope.

Diamond hands originated from forums like Reddit, referring to those investors who resolutely refuse to sell, regardless of how much their held assets fluctuate.

It is important to note that this implies two conditions: highly volatile financial assets and a firm refusal to sell. Long-term holders of gold probably cannot earn this honorary title. Only those who hold onto highly volatile speculative assets for the long term and refuse to sell, ultimately achieving significant results, qualify to be called diamond hands.

In the cryptocurrency world, where immense wealth can happen at any moment, no one is unwilling to become a diamond hand, but not everyone can become one; otherwise, the number of diamond hands in the cryptocurrency world would not be so scarce, with only a few already becoming legends.

To become a diamond hand, you must possess the following qualities:

1) Exceptional insight + luck; you can see the growth potential of this asset for a certain period in the future, and before it has run up, you can already see its enormous growth potential and certainty.

2) You have ample free capital, allowing you to invest a certain amount without affecting your current lifestyle and mindset.

3) You must be sufficiently resolute; you have a level of understanding that surpasses the general public and remain unchanged for a long time.

These three points are not complicated, but very few can truly practice them. Knowing is easy, doing is hard. Especially for most retail investors, regardless of the second point, the practical difficulty of the first and third points indicates that diamond hands are indeed one in a million.

Therefore, a basic characteristic of a diamond hand is: first, you need some spare cash, which most people will have; second, you need a cognitive ability that far exceeds that of the general public, which eliminates most people; finally, you need sustained emotional stability and determination, which further eliminates a large portion of people, making the probability of an ordinary person becoming a diamond hand very low.

It should be clarified that the above discussion pertains to the probability of an ordinary person; this market is not lacking those who dare to bet their entire fortune and remain unshaken through long-term significant drawdowns, and some of them have achieved great results, but these individuals are not ordinary people.

The harsh reality is that we can only see someone easily achieving victory; we may shout "Noblemen and commoners, is there any difference?" but may not realize the pain they can endure, which we cannot bear at all. This is both talent and luck, as well as the result of hard work.

If you can, then go; if you can't, don't force it. Sometimes waiting rewards you with value because you understand what true value is. Most of the time, waiting does not create value and ultimately turns into obsession. Recognizing truly valuable long-term players is inherently rare; they are either exceptionally intelligent, extraordinarily talented, or unusually diligent, possessing at least one outstanding quality.

So, if the probability of becoming a diamond hand is very low, can I get rich through short-term FOMO? The answer is still no.

3. The Traps of Short-Term FOMO: I Can, I Want to Go; I Can't Anymore, But I Can't Get Off 😂

First of all, bubbles in financial markets are absolutely a positive term, but you must understand bubbles, embrace bubbles, but never become a bubble. Short-term FOMO tests not only your psychology but also your operational skills. Its main tests are:

Everyone is making ten times a day, will you play?

Everyone has boarded the train, will you get on?

Others see 100 times, but you get off at 20 points.

Another golden dog comes out, but you are not on the train.

You got on the train, only to find yourself trapped.

The end of the show.

Taking the recent MEME frenzy as an example, this psychological state and cycle are played out every day, from observing, getting on board, increasing positions, to being trapped, stopping losses, and exiting.

You will discover a shocking phenomenon: during this period, it seems that there is endless money to be made, but the person who achieves great results is not you. It starts with big profits, then small profits, followed by small losses, and finally ends in zero, being trapped, or suffering huge losses.

Where exactly is the problem?

The characteristic of short-term FOMO is: high odds, but the win rate is not necessarily high. Apart from the generally rampant market, the FOMO market often concentrates heavily on a few assets for speculation, or hot money quickly rotates between different sectors, significantly increasing emotional and random elements, after all, no one knows what emoji or image Musk will post tomorrow.

The scenarios where short-term FOMO can make money are: entering early, running fast, and controlling your hands.

Entering early: You can discover the value of this asset earlier than most of the market, possessing a high sensitivity to market cues and judgment ability.

The probability of running fast: You can quickly identify top risks and withdraw in time; the ability to control greed.

The probability of controlling your hands: You can avoid random operations; once you are in, you want to buy everything; extreme position management and risk management ability.

Those who possess all three abilities are absolutely in the minority in the market.

We need to note that this does not mean that short-term FOMO is necessarily a losing game, but the probability of making big money in short-term FOMO is very low, and for most people, it remains a high-difficulty and undesirable path.

Buffett's teacher, Graham, once said: Bull markets are the main reason ordinary investors lose money. The profound reason behind this is that it is not the FOMO of a bull market that leads to losses, but the neglect of the enormous losses brought by short-term risks.

The paradox of financial markets is that: a bear market does not mean high risk, and a bull market does not mean low risk.

For short-term FOMO, when you are observing, a small wave of people has already built their positions in advance. When you get on board, the daily multiple increases make you forget yourself, and at this moment, some people have already left early. By the time you realize something is wrong, you have already been deeply trapped.

4. Will This Time Be Different: The Current Cost, The Future Price

When we explore winning through diamond hands and short-term FOMO, we find that the probability of winning in both situations is relatively low. You might say, Trump is in power, policies are favorable, and the bull market has no upper limit, so both diamond hands and short-term FOMO will win. However, the actual situation is likely not so. Historically, there has never been an eternal bull market, nor an eternal bear market; everything is a cycle.

For ordinary people, we need to embrace low-difficulty investments rather than seek high-difficulty investments. This does not mean that since neither diamond hands nor short-term FOMO can win, we should simply give up. Every choice you make now is a cost, which may lead to huge returns in the future or may come with an unbearable price.

For most ordinary people, the probability of getting rich through any replicable method is very low; your resources, endowments, personality, and even the environment you are in may lead to failure at any time.

The way to get rich quickly is hard to replicate, but the reasons for failure are mostly similar.

The so-called low difficulty means that based on a thorough understanding of your own personality, combined with your resources and endowments, you should do what you are best at and have the highest win rate; everything else is about long-term persistence.

Assuming you cannot even secure basic living needs, you should look for a job instead of trying to cultivate diamond hand abilities;

Assuming you are someone with significant emotional fluctuations who cannot tolerate drawdowns, you should not repeatedly chase high in a volatile market; instead, you should focus on a target, using small amounts of capital for long-term accumulation, or you should concentrate on being a yield farmer, earning the most certain money.

Overcoming human weaknesses has never been an easy task. For most ordinary people, it is likely that they will not be able to challenge and overcome it for most of their lives. Therefore, the only low-difficulty thing you can do is to continuously learn from the practices of top experts, integrate them into your own system, and invest in what you are best at and have the highest win rate.

This is my insight and also advice for the vast majority of ordinary retail investors. It may not make you rich overnight, but on the long journey of life, losing less is also a form of victory.

Standing at the starting point of a new bull market, regardless of the choice, this time, I hope you can win!

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