Crypto Industry "Landlubber's" Confession: How Did I Outperform BTC and Steadily Achieve ATH?

Original Article Title: How I Built 8-Figure Wealth in Crypto (And Aiming for 9)
Original Article Author: @WarrenNakamotoX, Crypto Investor
Article Translation: Translated by Deep Dive

Editor's Note: This article shares the author's experience in achieving eight-figure wealth through cryptocurrency and aiming for a nine-figure goal. The key lies in designing a long-term compounding investment portfolio, emphasizing discipline, patience, and realistic expectations. The author achieves this by holding Bitcoin, utilizing fund lending for short-term trading, investing in blue-chip projects and angel investments, consistently outperforming Bitcoin's performance while protecting downside risk. The key to success is to focus on one's circle of competence, avoid chasing short-term gains, and enjoy the investment process, ultimately achieving steady wealth growth.

Below is the original content (slightly reorganized for better comprehension):

What is the best thing cryptocurrency can offer you?

= Life-changing returns

What is the ugliest thing cryptocurrency can take away from you?

= All the gains you've ever made

I know why you're here, the reason is the same as mine:

= To make money. Life-changing money.

We know it's possible because we've all heard those success stories. But let's be honest, you've also heard of those who had nothing in cryptocurrency, never turned things around.

So, the real question is: What sets these two types of people apart?

What is the true formula for success? How to avoid being "rekt"?

This is exactly what I want to break down in detail in this article.

As you know, the total market capitalization of cryptocurrency has been continuously growing. I believe it will continue to grow, possibly reaching $100 trillion one day.

· The global stock market is currently at $126 trillion,

· The global bond market is at $140 trillion,

· The real estate market is approximately $400 trillion,

· While the cryptocurrency market is only $3.5 trillion.

Bitcoin (BTC) is already a top-five global asset by market cap, and I am not at all surprised it may become the largest asset in the future. In the next 24 months, I believe Bitcoin will surpass Microsoft, Nvidia, Apple, becoming the world's second-largest asset.

But unfortunately, if the market continues to grow and you are still at a loss, there is definitely an issue. It could be that your method is wrong, your strategy needs improvement, or your skills require enhancement.

In any case, something needs to change.

The most important change, and the one most people get wrong, is expectations. They see someone achieving a 50x or 100x return and then jump in to chase the same gains.

I've seen too many people like this. Some even made a lot of money at one point, felt invincible, and then quickly lost it all. Why? Because they never built a system, lacked discipline, and didn't set truly realistic goals.

I was able to achieve a seven-figure wealth, not because I'm a genius, but because I set realistic expectations. Before entering the world of cryptocurrency, I spent over a decade in the stock market. My goal was simple: achieve a 40% Compound Annual Growth Rate (CAGR). Over seven years of compounding, the funds multiplied by 10. I did it, and I was incredibly proud.

I know that for most cryptocurrency traders, hearing about a 40% annual return may sound like a failure, but at that time, it was top-tier. The greatest investor of all time, Warren Buffett, has only achieved an average CAGR of 19.8% since taking over Berkshire Hathaway in 1965.

19.8% made him a legend. Sounds low, right?

But can you consistently maintain a 19.8% return every year for 60 years? Endure wars, market crashes, economic recessions, and chaos?

That is true strength! Not those fleeting, massive returns, but a quiet, mundane, consistently outperforming the market's return.

In the stock market, how do you determine your return is decent?

= Consistently outperforming the market.

And what about in cryptocurrency?

= Consistently outperforming Bitcoin's performance.

You might ask, why should you outperform Bitcoin? Because if you can't, then what's the point of investing in other coins? You might as well just buy Bitcoin and hold.

A reminder, Bitcoin has increased by over 10 times in the past five years. Do you know how many people lost money during this time? A lot. If they had simply bought and held Bitcoin, the ROI would have been 1000%.

Regarding outperforming Bitcoin, for example:

· If Bitcoin has performed at +30% this year, and you have gained +40%, you are doing great.

· If Bitcoin has dropped by -25% this year, and you have only lost -15%, you are still doing great.

To measure this, you need at least 5-10 years of performance to judge if you are skilled. So, as I mentioned before, this is a long-term game.

This is a game of patience, a game of snowballing.

So, forget about the question of "how to 100x quickly." The real question is: how do you consistently outperform Bitcoin's performance and never go to zero?

The answer is portfolio design.

· Design for longevity;

· Design for compounding;

· Design to protect against downside risk while capturing upside opportunities.

Even if you lose, there is still a great opportunity to win in the long run. That is the idea behind constructing and designing a portfolio.

Alright, now let's talk about how to actually outperform Bitcoin.

First, make sure your portfolio holds 100% Bitcoin. This way, you are already matching Bitcoin's long-term performance by default.

Then, I would borrow, with the borrowing amount never exceeding 50% of the Bitcoin holdings. The borrowing annual interest rate is usually around 5%. I would use these funds to do a few things:

Short-term Trading, up to 3 months

I only touch projects with strong fundamentals that can easily achieve a 2-3x return, usually projects that are solid even in a bear market. I usually exit at 50%-100% profit.

For example, if you have been following me: $ETH, $PENGU, $ANIME, $COOKIE, $KAITO, and some I have not talked about much: $HYPE, $RAY, $JUP, $SUI.

I accumulate actively in a bear market, sell after making a 50%-100% profit. By the time all coins hit new all-time highs in a bull market, I usually stop trading.

$KAITO and $HYPE are my focus projects for this cycle. But when they dip, I sometimes add more for short-term plays.

Cycle Ace, Single-cycle High-Conviction Investment, up to 12 months

This one really makes me happy. Currently, I allocate a maximum of 10% of the funds, but before reaching seven figures, I had allocated close to 20%. Early successful cases were $UNI and $CAKE, back then I hadn't named this strategy "Cycle Ace." Last year, I participated in the $HYPE Token Generation Event, achieving a 10x return within a month. Now I hold $KAITO, which has doubled and is still going strong.

The Cycle King has two conditions: "Selection" and "Timing".

The selection criteria are rapidly growing high-quality founders, a strong community, a product actually being used, capturing attention and still in its early stages.

In terms of timing, I only start looking in the first year after Bitcoin's halving, and exit at most two years later. This rule remains unchanged for now, but there may be adjustments in the future.

Angel Investing, up to 24 months

The sole reason I created this X account was to access better angel investment opportunities. So far, it's been effective. Through introductions from friends, I've connected with excellent project teams.

I have now backed 15 or more projects. I understand this is high-risk, high-reward, but these funds come from lending profits, so there is no real loss for me. I have indeed invested in a few bad projects, but overall returns are still good.

Through these three strategies, if I make money, I will use the profits to repay the loan and unlock my Bitcoin. This way, I only play with profits. If the profits are significant, I will buy more when Bitcoin drops, and then repeat this cycle.

If my trades and Cycle King strategy perform poorly, what should I do? First, your portfolio is not dead, Bitcoin still has your back. If Bitcoin continues to grow, you can borrow more funds to continue playing.

Your portfolio will only be ruined under the following circumstances: you have borrowed 50% of your Bitcoin, all your operations go to zero, and Bitcoin crashes by 50%. You would have to be extremely unlucky, getting every step wrong, to encounter this combination of setbacks.

This is my entire operation. I don't play small-cap meme coins, trade NFTs, or mess with perpetual contracts because I'm not good at it. I tried to learn, but found it wasn't my area. If you are good at it, you can use borrowed Bitcoin funds to do what you excel at. Focus on your own skill set; everyone has different skills.

Most important to me is: I love my life. I structured my investment portfolio in a way that ensures I can sleep well, enjoy each day, do what I love, and never feel pressured by investments.

Even when I started my Web3 journey in 2017, the goal was never rapid wealth accumulation but slow and steady wealth building while enjoying the process.

In 2017, I decided to achieve $100 million in wealth by 2030. Not through luck, not through gambling, but by building a bulletproof compounding system over time. I feel I'm on the right track currently, which is why I'm sharing all of this here. You don't need to copy 100%, just choose the parts that suit your risk tolerance, lifestyle, and goals.

I'm sharing these not because I think I'm great. I'm still in the learning phase, striving every day to keep up with this rapidly changing industry. I hope you can learn something from this article, find useful strategies, and improve your portfolio performance.

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