Surviving the Biggest Crypto Crash in History: My Thoughts

Author: Route 2 FI Translation: Shan Ouba, Golden Finance

I've been reflecting on how I should spend my life lately. For the past four years, I've been fully immersed in cryptocurrency, and when I say fully immersed, I mean it—I've done almost nothing else. This means that most of my waking hours are spent thinking about cryptocurrency, either directly or indirectly: trading, trying new protocols, communicating with people, posting on Twitter, reading other people's opinions on Twitter, browsing newsletters, and listening to podcasts (mostly transcripts, actually, because I can read about five times faster than watching videos or listening to podcasts).

I really enjoy working hard, even obsessing over it. This doesn't mean that cryptocurrency is my only interest, but it is definitely my core focus right now. Perhaps one day I'll get bored, and then I'll spend weeks or months ruminating on it, eventually finding a new direction.

Looking back, though, my obsession with numbers and gambling is undeniable. The Black Friday crash was certainly terrifying, but I was largely unaffected. Before the weekend, I operated a delta-neutral strategy on the Lighter platform. My short positions weren't automatically liquidated like on platforms like Hyperliquid; as for my long positions, I only held spot positions. I didn't open any perpetual swaps on Bybit—though the day before, I was still trading a large DOGE/BTC scalping position. I closed my position because I wanted to have a good weekend. Looking back, if I hadn't, I probably would have lost a ton of money. So, I was somewhat lucky this time. I usually use low leverage (2-3x) to reduce the amount of capital I need to tie up on CEXs and DEXs. Still, I find it incredible that altcoins have seen an average drop of 62%, with some plummeting 85%-99%. This means that all traders who traded long on leverage have been devastated. Over the past few years, the cryptocurrency community has seen an influx of aggressive traders, first in the Solana ecosystem and eventually in perpetual swaps. Leverage has become the norm, and I use it every day. You could accuse these people of a lack of risk management, but in my opinion, using 2x-3x leverage is quite conservative. Honestly, I don't think people will stop using leverage just because of this crash—in a week or two, those aggressive traders will be back trading like nothing happened. As you can see in the chart below, there's no way to hedge against an average altcoin drop of 63%, especially since most coins have seen even greater declines. This is truly insane. So, who are the ones who are still holding on through this cycle? Those who are cautious and stubborn. Most of them only hold spot assets and observe new coins and projects for a long time before investing. They don't blindly follow the initial launch trend, and they usually don't earn huge profits. However, at the same time, their portfolios have achieved steady compounding growth year after year. Perpetual swap traders have been the hardest hit. Ironically, I think many of the coin traders (like the aggressive traders in the Solana ecosystem) fared relatively well—because they mostly traded spot and didn't use leverage. Of course, some of them dabbled in perpetual swaps, and if they had, they likely lost a lot. But many stayed strictly on spot trading, so while they lost money, they didn't lose it all. For perpetual swap DEXs, the aftermath of this crash will be interesting to watch. Short positions on Hyperliquid were automatically closed, but not on Lighter. As a result, Hyperliquid's liquidity providers profited, while Lighter's lost money. No one knows what the future holds for perpetual swap DEXs, but thanks to Friday's stress test, we have many lessons to learn and many improvements to implement. For example, will the HYPE token buyback model be adjusted? Is a 100% revenue buyback model sustainable? Will I stop using leverage? No. I understand that I'm responsible for all my trades and decisions. Risk always exists—if there's no risk, there's usually no chance of profit. Regarding DeFi, I expect a wave of liquidations. While DeFi held up relatively well during Friday's crash, fear has set in. I think many people will prefer to keep their assets in their own wallets rather than in third-party custody. Fortunately, USDE (the stablecoin issued by Ethena) has held up well this time. I've always felt that Ethena is the backbone of DeFi, essentially carrying the entire ecosystem. If Ethena were to fail, the consequences would be disastrous—for example, Pendle, which has 70% of its locked-in value in Ethena. Next, I'm considering which altcoins would be the best investment targets. Personally, I'm more bullish on BNB, MNT, and established cryptocurrencies that have been around for a while. Also, I think the speculative scene might quiet down a bit soon, so cryptocurrencies like PUMP and Fartcoin won't be my primary investment. For now, I'm primarily holding stablecoins, and I'll focus on purely news- and narrative-driven trading. This approach may not yield the highest returns, but it will at least protect my account capital well in the short term. Finally, I want to say this: Most people will never achieve their dream financial goals because they lack the traits of successful individuals. You're up against those who were born for this field. They don't count the hours they work, and they don't back down when faced with difficulties. They don't slack off when times are good, and they don't give up when times are bad—it's all part of their daily routine.

Wealth may be a superficial goal, but what really drives them is the pursuit of success, their own growth, their professional refinement, and their persistence in quietly improving their skills.

They don't obsess over the finish line, but fall in love with the journey itself.

That's why, when others burn out or quit, they can continue to win—not because they have to, but because they can't imagine giving up on the career they love.