Dialogue with a magical trader: Sneaking into the GCR community to buy Sol at the bottom for $9

Editor's note: This conversation took place in March this year. I am releasing it now because I have seen that many of his predictions have come true. In 2016, Shu left an international department of ByteDance to work full-time as a secondary trader in the crypto field. He sneaked into the famous GCR community and bought Solana at a low price of $9. We talked a lot about choices, secondary investment concepts, Meme, VC coins, short selling, Solana, and the mysterious GCR.

Talk about your experience in entering the circle

Nathan:What was your experience in entering the circle? What was the opportunity, and what stories have you had in the past few years? Shu: In 2013, when I was studying in the United States, I heard that my friends had bought Bitcoin and started mining. I paid attention to it but didn't buy it. Later in July and August of the same year, I saw Danny the Cow, who was very popular on Renren, mentioned Bitcoin. This aroused my curiosity, so I started to pay attention to this field and bought some Bitcoin later. I was still studying at the time, so I only bought a small amount with my pocket money. I remember very clearly that the price of Bitcoin soared from 200 or 300 US dollars to 700 or 800 US dollars, and even soared to 1,000 US dollars at the end of November. However, the price then fell sharply in December. Although I was just investing with a playful mentality at the time, I later realized that this experience played an important role in my subsequent growth, especially in the cycle of 2016 and 2017.

I just returned to China in 2016 and joined ByteDance to work on internationalization. One day, I noticed that one of our engineer colleagues was browsing a website for altcoin exchanges similar to Bitcoin. This reminded me of my experience in 2013, when I also bought some similar cryptocurrencies, such as Litecoin and Ripple. Because I never sold them, their prices have increased many times. This can be regarded as my second foray into this field.

In 2016 and 2017, I made some money from my initial investment, some of which increased many times. Many friends issued coins, and some friends joined Binance, etc. I remember that in December 2017, BTC reached 20,000 US dollars. In January 2018, there was a crazy rise in altcoins, but probably about 2-3 weeks later, the price of the coin began to fall. At that time, I was not a trader at all. I didn’t know how to trade. Anyway, I bought it and it went up, and I made money. I went to invest in new coins, but later I lost a lot of money, and lost most of my earnings, because I didn't know how to trade or read the lines. The real opportunity to change me came between March and April 2021, when the cryptocurrency market became active again. But on May 19, Huobi and many other exchanges suddenly exploded, causing me to lose millions of dollars in one day, which made me very depressed. In April 2021, I also noticed that there were some trader KOLs on Twitter. Because I had limited knowledge of this field at the time, I followed a lot of them. I followed a person who I thought was very powerful, called GCR. He had warned at the end of April, but I didn't know he was so powerful at the time. Because you have to follow each KOL for a period of time before you know whether he is powerful or not. In July and August 2021, I was in a rest period because I experienced that huge loss and felt very uncomfortable. At that time, I began to systematically learn various trading skills, almost from scratch, including learning K-line, etc. More importantly, I found that there are many powerful English traders on Twitter, but how to distinguish them from many KOLs is a big problem.

For example, in the 2017 cycle, the biggest lesson I learned was that most of the KOLs in the Chinese community were of poor quality. The reason is actually very simple. You can look at A-shares or some domestic experience over the years, because there are so many Chinese people, including those accounts such as Digital Madman in 2017. Many people make a lot of money and have a lot of fans. For them, the easiest way to make money is to cut the leeks of their fans, rather than providing some alpha to their fans. I think this is very different from the United States. Although there are also people cutting leeks in the United States, a small number of people are really excellent. They will not set up paid groups, but share truly useful information. But it is difficult to find such people. You may only find one in 1,000 Twitter accounts. The key is to learn how to find them, so I spent a lot of time observing them at that time.

By August and September 2021, I really started to pay attention to some people worth following, and my trading skills gradually improved, I started to make profits, and gradually made back my losses. I remember in October 2021, GCR predicted that the Bitcoin futures ETF would soon pass, and he posted a message on Twitter saying that he was going to create a "ReBirth DAO". I rushed in within the first ten minutes of seeing this post. Later, this post was closed within an hour, and he created a Discord group. After I joined, I began to communicate with many Western traders, understand their trading styles, and found that their styles were very different from ours. Slowly, I also met some very good traders on Twitter.

As for GCR, his full name on FTX is very long, and GCR is just his abbreviation. He ranks at the top of FTX's profit list. If you don't consider institutions, he can probably rank in the top two or three. He is a very outstanding trader. His track record on Twitter is that if he posts 100 messages, 99 of them are about trading and they are accurate, so his hit rate is the highest. This is actually the most concerned principle among our group of traders: you can't publish analysis after making a lot of money, that's "hindsight". There are many English-language leeks cutting groups in China that analyze in this way. But GCR usually gives predictions in advance, and sometimes provides specific trading points. However, he is not very active in the public eye now, and he communicates more in our small group.

Nathan: Are you doing secondary trading full-time now?

Shu: I am doing secondary trading full-time, because I basically regard GCR as an idol, and many of the transactions he said did hit the mark. He actually said at the peak of 2021 that you shouldn't do anything during the Crypto bull market, you should be fully committed, every 24 hours in front of the computer, trading and learning. In a bear market, you should start to build relationships with various project parties, depending on whether you are engaged in primary trading or working on project parties. Going all-in on trading in a bull market is an important opportunity to obtain alpha returns, and this opportunity may only appear once every ten years in the cryptocurrency field.

About investment style and play

Nathan: What is your style and play in secondary trading now?

Shu: My trading style is relatively aggressive, because most of it is my own money, and I definitely want a higher multiple of returns, so my risk appetite is relatively large, so it is definitely on the left side.

There are actually two types of left-side. The first type is technical traders who mainly use lines and various quantitative indicators, such as long-short ratios, for combined analysis. The second type is narrative traders, who pay more attention to the stories and emotional factors behind the market. There are many grasps for this. I am actually mainly a narrative trader with some quantitative analysis, but quantitative analysis is not the most important in my strategy. In the cryptocurrency market, due to the relatively small number of participants and the close relationship between referees, regulators, exchanges and large investors, the market is not as fair and transparent as the traditional stock market. Therefore, many technical indicators may fail or lag seriously in the crypto market, unless you only focus on mainstream currencies such as Bitcoin and Ethereum.

So I mainly do left-side, narrative-incentive trading, and a small part of it belongs to insider trading. For example, when Solana was in the bear market, because there were probably 5 or 6 people in the GCR group, the order might start from 3 to 5 million US dollars. But they usually don't directly disclose the specific order amount, but give a general direction and hint.

As for crypto traders, including our group, in most cases, they have their own password system, or this code name, with a lot of slang, so the outside world may not understand it. Many times, if you make a fund, you will definitely want stability. If there is too much retracement, it will not work. The first thing is to seek stability. For example, if you configure BTC+ETH, add 20%-30% SOL, and add 5%-10% Meme coin, it will be good. But if I think this Meme coin is going up, I may allocate 50% or 60% and add leverage, so it is definitely different.

Nathan: So to sum up, your trading style is: mainly on the left side. In addition, in the method of making decisions on a certain coin, there may be more narrative, trend, turning point and event analysis?

Shu: Yes, there are many influencers on Twitter, such as Willy Woo (@woonomic), who has a great influence on the market. He is very famous and has a very high hit rate. He should be the most influential among the current public speeches. There is also Anatoly (@aeyakovenko), who is the co-founder of Solana Labs and the spokesperson for the Solana system. These big KOLs are part of it, and some are more technical. They will analyze the order book for you and analyze the various outflows and inflows on Binance or Coinbase. I will also look at some macroeconomics, but in fact, the macroeconomics is not that important, because everyone knows that the macroeconomics will be strong, but there is definitely a disagreement on how strong it will be.

Specific to a certain project, such as Solana, or other currencies, I will see if I have some internal connections or information. This connection must be within the project party. If it is not the project party or not a core position of the project party, then the information they provide may not be accurate. The most important thing in Crypto is that you have to judge what level of the information pyramid your information is? Most people don’t make accurate judgments. They may think they are at the second or third level, but in fact they may be at the fifth or sixth level, so they are much slower. Once you are slower, your trade will be useless because crypto fluctuates very quickly.

Finally, market sentiment is also an important factor that is often overlooked.Although there are many social signals, these signals are completely subjective. If you only collect these signals objectively, such as counting the number of mentions of all major KOLs, and then trade based on this, your trading results may be very poor.Because most KOLs are trying to attract more fans, and most fans don’t understand trading, they tend to chase ups and downs. Although chasing ups and downs may be better at some stages, for example, if a KOL posts a tweet, you may follow the order within 15 minutes of the tweet, and you will find that your performance is very good, but many people may wait five hours before you enter again, and then you may lose money. Many of them are very time sensitive.

Nathan: Do you have any preferences for asset prices and FDV?

Shu: I have choices. I will have a different level of configuration. As for mainstream coins, I first bought Solana in January 2023 at a price of about $9. Because GCR has always been bullish on Solana, I also talked about the reason for Solana's bullishness last time. For example, BTC, ETH and some other L1s, among other L1 asset configurations, I am definitely the most heavily invested in Solana, because its liquidity is good enough.

The second level is to look at meme coins. Meme coins also have levels. First look at OG, for example, Doge and Shib in the last wave of cycles will be concerned. The second is chain specific meme coins, which are divided according to different chains and different ecosystems, such as Solana's Wif. We bought Wif at about 0.26, which is about ten times. Then there are pure meme coins, such as Pepe. Maybe everyone says that Pepe belongs to the Eth ecosystem, but I actually regard it as a meme coin without any chain specificity. Meme coins can also be divided according to different themes, such as whether it is a dog type or a cat type. If there are many dog-type coins with a market value of more than one billion US dollars, then should there be a few cat-type coins with a market value of one billion US dollars? If you go down further, what is the third most popular Pet? If you can figure out the series question, you guessed it right, it may be very valuable. Overall, we think that this bull market actually depends on two ends, either buy the most mainstream and powerful layer 1, or bet on the right meme coin.

Nathan: In the meme quadrant, is there a big correlation between the different animal attributes? For example, the dog category already has an OG valuation system, so cats will definitely benchmark such a correlation and anchoring with the dog category. Is there any value support?

Shu: No, you can only look at the broadest line. For example, if a dog coin is valued at 4 or 5 billion US dollars, then no matter how unpopular a cat coin is, it is still very likely to reach 1 billion US dollars, which is one-seventh or one-eighth of the dog category.

Nathan: What do you think about the performance of Solana's meme in this bull market, which is often better than ETH's meme? Is it related to the fact that the funds behind it and the influence of traders in different regions are not as good as those in the United States?

Shu: I think the reason is actually very simple. Two or three weeks ago, I tried to buy a few meme coins on ETH, and the gas fee was very high. As someone who came from a traditional Internet giant, ByteDance, I immediately understood that the on-board cost was too high. For example, if I deposit $1,000 or $2,000, my ETH gas fee is 10%, but Solana may be 2-3%, so of course I will buy Solana. And most people don’t buy with one or two thousand dollars, but with $100 or even tens of dollars. When they buy, they see that they have to pay $30 or $20 for gas fees for a $50 deposit, so they won’t buy. This is the most direct reason.

Another reason is that Solana has already made some signs in this cycle. In addition to the rise in the price of the currency, it has a lot of exposure in the United States. If you are in the United States, you may have come into contact with its physical stores, the mobile phones it released, etc., so whether you are inside or outside the circle, you actually have some degree of contact with it. If Solana supports bullishness in many aspects, then everyone will naturally wonder what is on it. This is a more logical thinking.

Nathan: If many other chains, such as many L2s, also begin to regard meme as their own market and growth engine, and go to meme projects, do you think these memes are worth buying?

Shu: They will definitely be listed, but I won’t buy them. This is another misunderstanding. Everyone likes to buy this kind of things that make up for the rise. I never buy things that make up for the rise. I only buy the fastest running. This is also learned from GCR. You should always pay attention to the coins that run the fastest. Your only job is to find out which ones run the fastest in this round of meme cycle. If you don’t get on the bus at the beginning, then find out when to get on the bus, such as when it pulls back to get on the bus. You shouldn’t buy those new things that make up for the rise, or you can only allocate a small part of those that make up for the rise. Because the things that make up for the rise are simply that your market maker or project party is not very competitive.

If your market maker is very powerful and has the most accurate judgment on BTC or the entire market, then shouldn’t you lead the rise instead of making up for the rise? In other words, suppose you are starting a business and you are one of the first to get financing, but if you are not successful in the first round of financing, it can only mean that you are not reacting fast enough, and slow reactions will lead to countless drawbacks in a capital-efficient market like crypto. Because everyone in crypto is fighting for attention, but attention is actually gathered in disproportion. For example, Bome may grab all the attention in one day, but these are all backed by big money. We look at its price curve, including the words of shouting orders. The price has risen so much in one or two days. There is no miracle. I don’t know why many friends believe that this is accidental. It has never been accidental. For example, when Solana saw the price reach $9, we roughly calculated that it could reach $18 in January. We all had a budget. Basically, we probably collected $3 or $4 million in the group at that time. GCR invested $1.5 million alone, and each of us invested a little.

Nathan: What do you think of the so-called "VC coins" now?

Shu: My personal style is not to touch any token that is mostly VC, unless the VC has been cleaned out, such as Solana. The reason is also very simple. VC relies on the money of the rich to invest, and the pressure is actually not that great. For example, a VC fund may have 300 million US dollars, but you are not taking your own money, so your motivation is naturally not that great. For the big traders in our group, taking other people's money, even if it is 10 times or 20 times, is completely different from taking your own money. So I don't pay attention to anything any VC says at all. I pay more attention to what ordinary people think.

Second, I pay attention to what the truly powerful houses think, such as the largest market makers of BTC, BlackRock, and Jane Street. To a certain extent, VCs are pure bulls. They can only shout bullish because of their job attributes and cognitive genes. If they don't shout bullish, they won't be able to raise money. It's hard to say whether they are really optimistic or just trying to fool LPs with false optimism, but such bullish remarks will affect and mislead the public. An accurate market must have both long and short positions. For example, in 2022, I made 70% more money from shorting than from long positions, and a large part of the money in Crypto will be made from shorting. It is certain that BTC will retrace 50% in the future. If you find the right time to short at the top of the bull market, you can also make a lot of money, and you don't have to worry about the callback, but you must have enough margin (this is not financial advice). In addition, shorting must be done on the right side, and you can't go all in, and don't guess the absolute top. However, ordinary people should not short easily, as shorting requires a lot of skills. But people who are good at shorting will definitely not be bad at longing, because shorting requires more judgment than longing.

For many people, patience is the most important thing for shorting, and the second is to ensure that the margin is sufficient, because sometimes leverage is used. I remember in 21 years, I shorted a small currency on an exchange, and the price of that currency soared 15 times in an hour, and I was liquidated. This is not good for the exchange either, because if the price fluctuates so drastically in an hour, it will seriously damage the reputation of the exchange. Generally speaking, this situation is intolerable. If a currency rises by more than 3 to 5 times in an hour, it means that the liquidity and order depth management of the exchange are not in place. Exchanges like Binance will hold 30% to 40% of the supply of the currency and will make their own market, so that even if the price fluctuates, the increase in one hour will not be that large. You will find that on Binance, it is common to increase by 2 or 3 times in a day, but it is very rare to increase by 10 times in an hour. There has been no such increase in the past two or three years. A 10-fold surge in prices within an hour can cause many people to get liquidated, which also shows that the liquidity of the sellers of the exchange is very poor and there is not enough selling pressure. Of course, some of my friends have also been liquidated in other exchanges such as Gate, where the price has doubled or tripled in an hour. They are all very good traders in the group, so later everyone stopped using this exchange.

I think some exchanges with Chinese backgrounds are actually a bit of picking up sesame seeds and throwing away watermelons. Because this field is very profitable in the long run, there is no need to ignore risk control for a little profit. It's like a casino, how can you let others lose everything in an hour? The best business is to let gamblers lose slowly.

Talk about "shorting" and leverage

Nathan: From the perspective of ROI and take risk, what range is generally better for leverage control?

Shu: Leverage depends on the coin. Secondly, it depends on your conviction for the trade. For example, if you think this may be the absolute bottom, or close to the absolute bottom, I may use 7 or 8 times leverage. Generally, I will avoid using leverage above 10 times, because a 10% drawdown is very common. It can even be said that a 10% drawdown is just to blow up these 10x leveraged positions. 7 or 8 times may be the highest I have ever used. Generally, it may be 4-5 times. Another thing is to look at the position. For example, when I have a lot of money in my position, I may use 2 or 3 times leverage. As long as a trader tells you that he often uses 20 times leverage, either his position is not big enough, which is meaningless, or his buddy is not far from being blown up. Because if any coin in crypto has a 5% drawdown, won’t the 20x leverage blow up? BTC will blow up if it draws 10%, won’t the 10x leverage blow up? In fact, with 10x leverage, many coins are prone to explosion; many small coins may retreat by 30% or 40%, and then 3x or 5x leverage will all explode. And generally speaking, positions cannot be filled up all at once, they are all added slowly.

Things about buying Solana at $9

Nathan: Let me focus on why you dared to buy Solana at $9?

Shu: Yes, I bought it at $9, and then the price rose to $18 or $19. I think the first opportunity was the bankruptcy of FTX. At that time, FTX exploded, and many people lost a lot of money. After FTX went bankrupt, I didn't try to recover the losses for almost a month. It was not until the beginning of December that my emotions slowly calmed down and I began to pay attention to some things. At that time, GCR created a small group in mid-December. About 50 people joined in the first five minutes. We also joined and had some discussions. GCR said that the end of November might be the lowest point and the market was at the absolute bottom. He predicted that there would be a huge rebound in 2023 and a bull market in 2024.

Here is a plug-in. GCR predicted a lot of things and the accuracy rate was very high. For example, he predicted that Trump would be elected as the new president of the United States with a 90% probability in mid-2023. According to the current trend, the probability is actually very high. GCR bought Trump's meme coin at a price of 0.1 or 0.2 US dollars. Last week, he said that the token had a floating profit of more than 35 million US dollars (this conversation was in March this year). He also predicted that Luna would crash and predicted the emergence of friend.tech. He predicted a lot of things. He is the strongest trader in history, no one else.

Generally, ETH's competitor will rise more than ETH. In this cycle, ETH's biggest competitor is still Solana. First, Solana has raised the most money among all ETH killers; second, Solana is relatively an Americanized public chai. Its name comes from a beach in San Diego, California. Several of its founders are from Qualcomm, which can be found on LinkedIn; third, Solana's ecosystem has still come up with some attractive things, such as StepN, such as wallets made by some third-party developers. Their entire team is very Americanized and relatively elite. Another important reason is that I went to their offline store in New York. In June and July 2022, I returned to the United States and found that he opened a physical store here, which proves that his financial resources are still very good. Otherwise, he would not have needed to open another store during the bear market. All these prove that Solana still wants to do big things in the next cycle.

At the end of August last year, I went to Mexico to participate in the Ethereum Hackerthon. I think V God is completely different from a few years ago. He has several private bodyguards and feels a bit like a deification, as if he has no motivation. GCR often says, why should a coin be pulled, because it has motivation. It is difficult for a team to succeed without incentive. I think Ethereum is not motivated enough, including Vitalik and other Ethereum OGs who have been resting for too long, just like the old Tencent and Alibaba, they can't compare with new competitors. These reasons make me think Solana is better than Ethereum, and we calculated at the time that most of Solana's supply was eaten up by FTX.

I remember that in April and May last year, GCR judged that BTC ETF would definitely pass, but the timing of passing was unknown. So all the wash-outs before this timing were normal. Once this timing passes, if you buy Solana within two or three weeks, you will find that its price is still very low. In addition, when an emotion is pulled to fear the most, it will generally rebound. This is the experience of crypto. Counterfactual is not necessarily the best trade, but the best trade must be counterfactual.

Nathan: Luna is also counterfactual, so why not buy Luna? Shu: Luna's crash is different. Luna's can be calculated mathematically, but his can't be sustained. Solana's case is different in that after FTX collapsed, Solana experienced huge sell, and after it stabilized in 2022, it proved that most of its selling pressure has disappeared. We looked at the selling pressure on the order book. We observed it for a long time, about two or three weeks, and found that the sell wall of selling pressure is very low, and it only takes a little buy pressure to push it up. If you believe that FTX is the biggest catalyst, there is no more bearish scenario than this, then BTC has actually reached the bottom. Once BTC stabilizes or rebounds a little, which ones will rebound the most? This is a very large alpha. Nathan: Do you think Solana's FDV will exceed ETH? Shu: I think it may be a bit difficult for Solana to flip ETH. Because our judgment is that the passage of ETH ETF is basically a foregone conclusion, it is just a matter of time, it is not a question for if but a question for when, then ETH will also rise after the passage of ETH ETF. Solana will definitely pass, but not in this cycle or when this cycle will be, we don’t know, so if it does not have this Legitimacy and traditional Traditional big money In, how long it can rise, we don’t know. Therefore, I think it is difficult to flip ETH in this cycle. I think ETH ETF will definitely be realized in this cycle, then with traditional money help, can Solana flip ETH? It is very difficult. Because the scale of traditional funds is not at the same level. (This conversation took place in March this year, when the market was in a mood of fud Ethereum.)

The second reason is that Ethereum itself has a much longer history than Solana. It can be found that in the ranking of coinmarket cap on all cryptocurrencies, it is difficult for later coins to flip the previous coins. Because for example, Ethereum, the whale may have bought it very early, and he doesn’t care whether the price of Ethereum is 3200 or 4000. If he keeps holding it, it means that he may not have selling pressure and selling incentive, because he is not a trader.

About GCR

Nathan: Let’s talk about your GCR group.

Shu:GCR is very strict, and only a small number of people can stay in the group. Most of the group members are large traders, and their asset size may reach tens of millions of dollars, or even billions of dollars. GCR's standards are therefore very strict, and every word is required to be rigorous. We mainly discuss price-related topics, but occasionally we also touch on other topics, such as US politics or topics like whether Trump can be elected. For all discussions, we look at them from a trading perspective, so the requirements are very strict to ensure that our statements and predictions are accurate. This strict requirement may affect your life, especially if you want to be a good trader, which means that you will have higher requirements for yourself and the environment around you. Of course, it depends on personal choice, but if you choose this path, you must strictly demand yourself and ensure that your words and deeds are rigorous. For example, sometimes GCR will use code words to mention a certain time period or a certain currency, and you need to study it to understand what happened during this period and which currencies may be affected. Big traders usually don't tell you directly, but give some hints, and you need to interpret them yourself.

We actually have two small groups, one with about 50 people, and another small group with about a dozen people. There are some European traders in the group. We can summarize the European traders: First, Europeans may have some mysterious self-confidence; second, many European cognitions and cultural preferences may be due to the vast land and sparse population, and Europe always has a sense of cynicism. Europe can't actually affect too many markets, although there are also good traders in Europe. The biggest influence on the market is still American traders, including Wall Street, etc. We say that BlackRock CEO saved the ETF. Otherwise, this bull market cycle would not come so soon.

The shortcoming of Asian traders is that most of them do not have such a deep understanding of American culture. Secondly, everyone's homogeneous thinking is particularly serious, which may be due to collective education. This is not only China, but also Japan and South Korea. When a currency rises, everyone chases it, but everyone competes for operational excellence and the ability to execute quickly, but it is still very tiring to make money. It is better to follow a big trend. For example, if you buy Solana at a very low price, you will keep holding it. This style is very popular with American retail investors. Hold it and sell it when it has increased 10 or 20 times. This is much easier than fast-forwarding and fast-exiting, and it is also better for the trader's mentality and physical health.

Nathan: What is the food chain or contempt chain of traders in different regions in terms of market influence?

Shu: According to my observation, Europe still has some advantages over Asia. The first reason is that they are relatively closer to white culture and can understand some American culture relatively better. Moreover, European traders have a great advantage in that they do not have the collective thinking of Asia. Europeans, like Americans, are not affected by collective thinking. Compared with Asian traders, they are more independent thinkers. The second point is that Europe has a certain advantage in time zone. In the Asian time zone and the American time zone, traders have a period of wakefulness. You will find that from the last cycle to the current cycle, when many coins rose and fell sharply, they often did so at two or three in the morning in China, which is very unfavorable to Chinese traders or Asian traders. But I recently looked at this cycle and found that some mainstream coins actually performed better in the Asian time zone, but this does not mean that Asian traders are good, because I know that some American traders have moved to Asia.

Nathan: Is it a trend for top North American traders to live in Asia?

Shu: Some of them moved to Asia mainly because of the cost of living, as well as food and other aspects. With the same amount of money, they can live like an emperor in Asia. But they will not move here for a long time. They will come here for a few months or half a year in a short term, which is also a kind of relaxation for trading, because it is difficult to relax in a familiar environment, but when you go to an unfamiliar environment, you may have to learn and adapt.

When trading, you can't watch it every day. For example, there are big retracements in the bull market. For example, when the retracement is 20%, if you watch it every day, it is easy to make some impulsive transactions, just like trying to catch a knife. So the sense of rhythm is very important. When the retracement is 20%, you don't know whether it will retrace 25%. At this time, it is best to go on vacation for a few days and then come back to observe. Don't try to guess the bottom. I have seen many Asian traders who will try to guess the bottom, but end up messing up their mentality. When it goes up, they regret that they didn't buy earlier and chased it again. When it retraced again, their mentality was messed up, and the entire bull market cycle may have greatly reduced their returns.

Nathan: How to solve the earlier and better discovery mechanism? It seems that many Asian traders are not only strong in execution, but also better at early project discovery.

Shu: There is no methodology. First of all, everyone always wants to summarize a paradigm and path, but this may be wrong in crypto trading. For example, the coins that make 1,000 times or 2,000 times, or people like this, cannot form a methodology. To form a methodology, you must have at least three samples before you can say that a rule is formed, but this kind of thing generally does not exceed two.

I have seen all kinds of stories flying around in countless cryptocurrency trading groups, but in fact, you can just watch them and think they are funny. You have to strictly control your information input, just like what you eat every day. If you eat pre-prepared meals every day, how can you be healthy? You can't be healthy. I basically only follow two or three Chinese KOLs, and the rest are all English KOLs, so my news source is very clean. Including the content I see on WeChat, I have quit other groups because you will become a reverse indicator. I have also been in ByteDance and understand the subtle influence of information flow on people. The information you receive every day will subtly influence you, rather than simply being classified by your brain. You have to make sure that all you see are alpha. Or to say, strive for alpha to the greatest extent, this is very important.

Another common mistake is that some people think it is helpful to leave a few negative examples, but in fact this is very wrong. For example, there is a person named Alex in the group. He once made 200 to 300 million US dollars in the last cycle and became the first on the profit list of the FTX trading platform. But then he lost tens of millions of US dollars in a few days. He shared an experience that is worth learning from: The opposite of the wrong is not necessarily correct, so the counterexample is not valid, and there is no so-called counter indicator.

You have to spend a lot of time in front of the screen. Each KOL may take a long time to track. For example, if you are a KOL who is a trader, you have to remember many of his calls. If you can't remember, you can use Excel to remember. You have to remember whether many of these traders' calls are accurate. If there are ten calls in advance, basically seven or eight can be accurate, then you should follow him and focus on one class, which may be a method.

In addition, I found that the most powerful traders are introverts, not extroverts, and their speaking styles have a large ego. People with a large ego are not necessarily good traders, but most traders have a large ego. Because of his large ego, he attaches great importance to every word he sends to the public, and he will be responsible for his words. In the GCR group, we will count how many words you have said every week, and you will be forced to make a few price predictions every week. You will be judged based on the prediction, and the worst 20% will be kicked out every week. In summary, first, control your information input; second, find your own alpha following.

Talk about subsequent trends

Nathan: What do you think of the market trend and rhythm of this bull market cycle? Shu: We traders only talk about things that are relatively certain. I dare not say the specific time point. Because I am conservative, I can only say that I think there will definitely be a bull market in 2024, but I am not sure whether it will be in 2025. It may still be in the first quarter of 2025, but I am not sure whether it will be after that. In terms of price, some people say that BTC will reach 200,000 or something, which I think is a bit too bullish. Although it is possible, to be honest, I would be very happy if it can reach 100,000. Because 100,000 is a big psychological threshold, and many people may underestimate this. 100,000 is six figures, and we are all five figures now. This is a breakthrough at the psychological level, just like the meme coin going to zero. I suspect that most whales will have a sell off when they are close to 90,000 or 100,000. At that time, it depends on how the recovery of the sell off is. So I think 100,000 is good, and above 100,000 is of course the best, but it doesn’t really affect me, because when it reaches 90,000, I may gradually start to reduce BTC and play more altcoins.

Nathan: How is Solana going?

Shu: Solana is now more than 190 (the conversation took place in March this year). I think it’s no problem to double it to 300 or 400. I’m still relatively conservative. In the last bull market, BTC’s ATH was more than 60,000. If this bull market adds another 50%, it will be about 100,000. In the last round, Solana’s ATH was 260, so I conservatively estimate that adding 50% or 60% will be about 400, and it may be higher, because BTC has increased by 50%, and Solana is more flexible, so it will definitely increase by more than that.