Author: degenspartan, eGirl Capital

Compiled: TechFlowGPT

Charles D Ellis (a still-living senior investment expert) classified modern (traditional finance) investment as a "loser's game" (I agree with this view).

There are two types of games:

• Winner's game: Victory is determined by superior skills beyond expectations

• Loser's game: Victory is determined solely by making fewer mistakes than other players

In the early days, crypto was a winner's game - participating and winning required above-average technical knowledge.

Today, I believe crypto has largely evolved into a loser's game - just surviving is enough to win.

(This is not a binary inflection point, but a change that has occurred since 2020 as professional players have become more involved.)

But note: there will always be winners and losers, whether in crypto, traditional financial markets, or most things in life.

Take the MEME coin craze (a manifestation of speculative behavior in this cycle) as an example. To win, you may need some technical knowledge, understand smart contracts, monitor liquidity pools, and perhaps have a cute following on Twitter so you can exit liquidity and sell.

Winning is winning, whether or not you've crossed legal or moral boundaries. I won't say it's right, but I do acknowledge it as a way (acknowledgment does not equal endorsement).

If your sense of justice starts to burn, then welcome to the crypto world. If you can make money without permission, you can also lose money the same way, the Lazarus Group (North Korean hackers) says hello. From the perspective of a loser's game, you "win" because you don't participate at all, because you know you don't have a significant and lasting advantage to truly win.

MEME coins are a zero-sum (or even negative-sum) game, but that doesn't mean no one can make money. Certainly, someone is making money, the question is, is it you? There's an old saying that if you can't spot the sucker at the poker table, the sucker is you, and that seems quite apt here.

Another case, winners in the winner's game:

As a degen, I've personally been on the crazy frontlines of "Food Farming" (note: referring to the DeFi summer period), where I was digging up those worthless tokens.

My advantage at the time was that I was clear-headed enough to know these tokens were worthless, so I understood that holding them long-term or participating in the tempting high APR Pool 2 was suicidal.

So, as a cautious person, I mined a lot of soon-to-be-worthless tokens from Pool 1 and repeatedly extracted funds from the liquidity pools until they went to zero.

The winners in the loser's game were those who didn't participate in DeFi farming at all, and ultimately survived the 2021 bull market, while the competitors had already self-eliminated.

The key is advantage

What I'm saying is that in any game, you need an advantage to win.

I know this sounds unfair to the average speculator who doesn't have a fan base to freely dump tokens, but life is unfair.

The right response is not to complain about the unfairness to the average speculator, but to reflect on what to do in the real situation. Redouble your efforts, dig deeper and do "due diligence" so that your trench warfare tactics can give you an advantage? I'm not sure about that.

Someone will immediately argue against my cautious, anti-trench mentality, thinking that I'm high and mighty because I'm already rich and no longer need to fight in the trenches for 100x returns.

However, let me remind you clearly that on-chain evidence shows I only have 1 ETH, so if anyone needs to fight in the trenches, crypto brothers and sisters, it should be me.

In a sense, we're all playing a dumping game - each of us just operates on different time scales.

How to gain an advantage?

So, if you're not actually a genius, how do you gain an advantage?

Step out of the game and look at the big picture.

You win by choosing to only play the games where you have an advantage and surviving.

Specifically:

Whether the market has already peaked, or this is just a bear market trap (by the way, this is the biggest trap I've ever seen) (but they won't trap me), is surprisingly not that important.

The most important thing is that you can survive, no matter what happens. I think this simply comes down to having enough capital reserves so that you're never forced to sell too early or forced to participate in the negative expected value hunger games you don't have an advantage in.

A portfolio consisting only of cash and crypto, if sized appropriately, will allow you to remain "stupid" and not go bankrupt for much longer than most.

This is my lonely fortress.

(Well, at least that's my version. The gambler's version is actually more defensive, because you live off the interest of your portfolio, while my version is to artificially create a payment that matches your spending by dividing your portfolio into upside risk and defensive capital, which can only last as long as your capital reserves.)

Instead of 100% in crypto, why not slightly lower it, like 90% crypto and 10% cash? Or any number that suits you, to ensure survival while maintaining exposure to the market.

If the market has already peaked - and you have a lot of cash + other crypto assets - and the market is stagnant for the next 4 years, what then?

Carefree. You'll be fine. And most others - maybe not so much.

If this is the biggest bear market trap I've ever seen (by the way, it won't trap me), and you have a lot of cash + other crypto assets, what then? You'll end up with not just amazing returns, but astounding returns.

Play the world's smallest violin and mourn that you only became a billionaire, not a ten-billionaire.

Anyway, my point is that you can create and use a truly tangible advantage to win, and that is not dying.

Survive, and you'll gradually notice that the people around you tend to blow their own heads off (too soon?).

Those public-facing suit-and-tie types won't talk about this, because they can't. They don't have that advantage. They need to write reports, tweet as thought leaders, underperform benchmarks, and suck up to investors.

Only individuals like you and I can truly adopt and leverage this strategy. Sitting in your lonely fortress, telling everyone else to "fuck off" - this doesn't have to be a last resort, it can be a chosen and enjoyed way of life.

The simple path to victory

You don't need to do anything fancy or special to win.

You don't need leverage, options, perpetual contracts, futures, etc. In fact, you hardly need to know or do anything. Abandon all of that. Enjoy the eternal sunshine of the mindless.

You just need to not do anything stupid, while others are tearing each other apart, killing each other, and financially self-destructing. The weak are eliminated from the group. The strong survive, and we live to die another day.

Just don't die.

If you survive, you have no choice but to succeed.