From Zero to a Hundred Times: The Growth Journey of a Legendary Investor

In the cryptocurrency field, there is a notable story of an investor. In less than 3 years, he achieved a 100x return and is now transitioning to secondary market investments, still performing excellently. The trading insights that this investor has never publicly shared are finally being unveiled.

This investor entered the cryptocurrency field in 2017 at the age of only 20. He majored in economics and minored in entrepreneurship at university, actively participated in extracurricular activities, served as the vice president of the investment club, and was reported by the media as a rising young investor.

After graduation, he joined a large oil company as a trader, responsible for shipping, analysis, and trading. With a growing interest in blockchain, he decisively resigned from this job. This experience in commodity trading laid a rigorous foundation for his future crypto investments, enabling him to minimize losses during events like the FTX collapse.

He gradually grew into a fundamental investor, focusing on the practical application scenarios of cryptocurrencies. This led him to delve deep into the DeFi field at the beginning of 2019, fully grasping the opportunities brought by the "DeFi summer."

He has now established his own investment company, primarily focusing on secondary market investments, and is also an opinion leader with hundreds of thousands of followers.

He said: "In the process of growing into an investor, I gradually formed my own investment philosophy. Every investor has a unique investment philosophy, just like how Buffett represents long-term value investing. Once an investment philosophy is established, one will start to look for suitable investment strategies. These strategies will adjust with market changes, but the core philosophy usually does not change easily."

Through these experiences, he realized that successful investing requires not only keen insight but also the ability to continuously learn and adapt to the market.

Formation of Investment Philosophy

In the process of growing into an investor, he found that everyone has similarities when exploring investment concepts.

Most people initially come into contact with stock investment from a fundamental perspective. However, in the past 10-15 years, the importance of the U.S. stock market has been rising, becoming the only market in the world with a long-term upward trend. In contrast, European and Asian markets have not shown a similar long-term upward trend. This indicates that not all markets will rise over the long term; the key lies in the fundamentals of the overall market.

Secondly, traditional value investment strategies are losing their appeal. Narrow value investing, which involves investing in stocks with high price-to-earnings ratios, has performed poorly over the past 10-15 years. In contrast, investing in projects with growth potential, such as technology stocks, has performed much better. He also tends to invest in such growth-oriented projects.

He believes that to achieve returns that exceed the market, the key is to identify projects that can surpass the market growth rate earlier than the market does. This is the core of obtaining excess returns.

He believes that cryptocurrencies are very suitable for this global investment strategy because they are a global asset. If a crypto project finds the right market positioning, its growth potential can be realized on a global scale.

This also explains why companies in the United States and China can achieve success, as they can rapidly expand in a large market. In contrast, regions like Southeast Asia face difficulties in business expansion due to market complexity.

Investment Strategy Unveiled

He stated: "Our fund size is approximately in the range of eight to nine figures. We adopt a typical fundamental-driven investment strategy for selecting cryptocurrencies, mainly focusing on small to mid-cap cryptocurrencies. Large cryptocurrencies like Bitcoin and Ethereum are not our primary investment direction, as our goal is to outperform the market benchmark, which is the performance of Bitcoin and Ethereum."

"When we were established in 2020, we primarily focused on the DeFi sector. After that, whenever we believe a particular track has potential for growth, we consider investing in it. Last year, we also invested in several AI projects, and the gaming sector has always been a key area of our attention."

Someone asked him: "How do you ensure you have a deep understanding of all these areas?"

He candidly stated: "This mainly relies on the investment of time. This is actually a threshold; as long as you are willing to spend time, everyone can reach a level suitable for investment in a relatively short period. Of course, you cannot understand every detail as deeply as a technician. But as a good investor, you do not need to master all the details to invest; you only need to have a basic understanding to start investing."

Advice for Newcomers

When it comes to quickly understanding a new track, he proposed a unique three-step method.

The first step is to assess the degree of integration between this track and cryptocurrency. He believes this is an important lesson he learned in 2017. Sometimes people will force an application onto the blockchain, but in reality, the level of compatibility between the two may be quite low.

The second step is to assess the potential for rapid growth. Since investors are generally eager to see returns, a sector that takes a long time to develop may lack attractiveness.

The final step is data support. You need to prepare some data to support your optimistic view of this track and give yourself some time to validate your judgment. For example, if you are optimistic about a certain track, you may need 3-6 months to observe whether there is data to support this view. If the data has not emerged after 6 months, you need to reassess your judgment.

Learning from the experiences of others is a wise move, and drawing lessons from one's own experiences is an even smarter choice.

Investment Lessons

In the operation of the previous fund, due to some force majeure factors, they launched a new fund from 2020 to 2023.

Many of his previous supporters expressed strong support for the new fund and invested money in it. This resulted in quite good performance for the latest fund.

Reflecting on this experience, he believes that there are many lessons worth learning for entrepreneurs. He points out that the investment industry has numerous opportunities and relatively low barriers to entry. However, this industry also has its difficulties, as many aspects are still immature and can easily lead to speculation.

He mentioned that in the industry's history over the past 5 to 7 years, the key to success lies in "survival." As long as one does not fail, they can be considered a relatively successful investor.

In the investment process, in addition to market risk, there are two main risks to be aware of:

First is the custodial risk. He believes that when managing other people's funds, there must be a complete custodial operation in place. Recently, some exchanges have suffered from hacker attacks, losing billions in funds, which is unacceptable in 2024. Investors should not spend too much energy on custodial issues, but should use the top custodial services in the industry to address this problem.

Secondly, there is counterparty risk, including that of the exchange and the investment project itself. Some people lack imagination regarding these risks because everyone generally holds an optimistic view of the future. However, once problems arise, such as borrowers not repaying their debts or exchanges going bankrupt, investors can face significant losses. He reminds everyone to conduct proper risk assessments and not to easily trust the promises of the project parties.

He admitted that he had suffered losses in both custody and counterparty risk. Starting from 2022, they discovered an imbalance in the market: a large number of venture capital (VC) funds emerged, while the market did not have enough liquidity to absorb this capital. Especially in the United States, the scale of some large VC funds far exceeds the capacity that the market can bear.

This, on the contrary, provides opportunities for the secondary market, as the secondary market is highly volatile and many investors are reluctant to participate.

More and more quality projects are being ignored after issuing tokens, as VCs often only focus on early investments and neglect subsequent operations. Therefore, he hopes to fill this market gap and provide support for projects in need of assistance. The role of VCs is becoming more diversified.

How Should Retail Investors Respond to Mature Markets?

When talking about the comparison between this cycle and the previous one, he believes there are many "watershed" moments in the market changes, such as the collapse and liquidation of FTX, as well as a certain trading platform reaching a settlement with the U.S. government; these are all milestone events.

"Of course, there will still be some unconventional practices in our industry, but I think this approach will become increasingly difficult, although it's not completely impossible."

"Just like this year's performance, why did Bitcoin reach an all-time high, but many people feel they haven't made much money. This is because our investment positions in the primary market and smaller cryptocurrencies are usually larger than in Bitcoin."

"The biggest change is that the market is indeed moving towards a more institutional direction. The largest trading platforms in the industry have reached a settlement with the U.S. government. Therefore, they may face more restrictions in their operations in the future."

How to Accurately Determine the Entry and Exit Timing of Investment Targets?

A venture capital friend asked: "I often read your investment reports, and the performance is excellent. Moreover, in this process, there are many assets that you noticed but others may not have. You also have heavily invested tokens, but the market liquidity isn't that great, so how do you determine the entry and exit timings for specific assets?"

He replied that this is indeed the most difficult part to grasp.

Market timing is very important for this industry. He believes there is no completely correct answer and adjustments need to be made according to market conditions; they have been continuously adjusting their strategies.

He believes that the biggest difference between this cycle and previous ones is that when you see projects with strong fundamentals, you should be more proactive in taking profits.

"In this cycle, I believe that the truly good profit opportunities do not exceed two months. Specifically, the best profit exit timing is during the short period from the second half of March to the first half of April, which is about one month. If you miss this opportunity, it is easy to be far from the peak."

"Therefore, you need to consider from a macro perspective, focusing on market liquidity, trading volume, and market sentiment. You should also pay attention to the positive and negative changes in funding rates. We are continuously increasing the analyzable data to find better allocation timing from a macro perspective."

In terms of fundamentals, he will also pay attention to the on-chain trading volume, observing whether there are large-scale buying and selling activities.

At the same time, attention should also be paid to the growth of the fundamentals. Because he believes that from a fundamental perspective, many blockchain projects often go from being severely undervalued to overvalued in a very short period of time. The field of AI is the best example.

He believes that the AI field was relatively underestimated last year. At that time, everyone had a rather conservative attitude towards crypto AI. However, as the bull market arrived, people began to hype it up. Many projects have increased by more than ten times.

Successful Investment Cases

Looking back, he mentioned that the project with the highest peak return rate was a certain game project, with a peak return rate close to 2000 times, and the investment cost was around 8 cents, with the highest price exceeding 160 dollars. Of course, it is impossible to sell everything at the peak, as some tokens are still locked, and although the return rate is very high, the investment amount is relatively small.

At the time of the first round of financing, it was believed that there were still very few investors in this field, and coupled with the fact that it was during a bear market, the total financing for that round was less than 1 million dollars, so they did not invest a lot of money. However, in terms of return on investment, this project had the highest.

From the perspective of the field, the most successful investment has been in DeFi. They entered this field early, so basically all currently successful blue-chip DeFi projects have received investment, such as a certain derivatives trading platform, a certain decentralized exchange, a certain lending platform, a certain yield aggregator, and a certain synthetic asset platform.

Their investments in the secondary market have also been very successful. In the early stages, many DeFi projects did not have a so-called seed round, and investment could only be made by purchasing tokens or participating in liquidity mining. Many of the projects mentioned earlier are investments in the secondary market.

Lessons Learned from Major Events

After experiencing some major events, he has set higher standards for the team's integrity. If a person's character has issues, no matter how successful their project is, it can collapse in a short time.

The industry has experienced many similar events, and some individuals and institutions that once had significant influence in the industry ultimately collapsed due to issues of character and crossing moral boundaries, even if they were very successful. For investors, such investments do not hold much significance, unless you are pursuing very short-term gains.

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