In Friday's article, a reader commented:

“……Holding onto the targets you believe in for the long term…… can indeed maximize returns by making time your friend, but there is one prerequisite: your choice must be correct. However, what if it’s wrong? How many decades do we have in life? Almost all value investors emphasize long-term holding, yet it seems that none have a remedy for their erroneous decisions or a stop-loss strategy for missed opportunities…… Is a decade or two of wrong choices too long a cost?”

I believe the key to solving this problem lies in finding a measurable, quantifiable, and objective standard that can quickly determine the correctness of an investment.

In the traditional stock investment field, I think it’s relatively easy, as we can use discounted future cash flows to make judgments. But in the crypto ecosystem, it’s not so straightforward; I will categorize and judge based on the attributes of the assets. The series of articles I wrote earlier attempted to classify the assets in the crypto ecosystem.

According to the classification method I summarized earlier, I generally categorize the current crypto assets into the following types:

- Collectibles led by Bitcoin

- Assets with mixed attributes led by Ethereum, which have both commodity properties and resemble traditional businesses with cash flow income.

- Governance tokens that only have governance functions

- Tokens with certain utility or equity attributes, but are actually vaguely defined

For collectibles led by Bitcoin, I find it the hardest to judge at present because it’s difficult to find a measurable, quantifiable, and objective standard.

Take me for example; my judgment on Bitcoin's future value and whether investing in Bitcoin is right or wrong is largely based on my subjective thoughts—through reading Bitcoin's history, understanding its operational mechanism, and my outlook on the future of the crypto ecosystem, I firmly believe that Bitcoin has a bright future in my lifetime.

But this is just my subjective opinion, and it is entirely possible for it to be overturned. In other words, I cannot rule out the possibility that in two years, a new crypto asset may emerge, or an existing crypto asset in some corner may suddenly exhibit stronger and more aggressive collectible attributes than Bitcoin.

If such an asset does appear, then for a long period of time from two years onward, it is very likely that the appreciation of this asset will greatly exceed that of Bitcoin, and it is even possible that Bitcoin's current price is its highest price in its lifetime.

In this case, I might stubbornly believe in my mind that Bitcoin is a unique existence and hold onto it, and ten years later, I might be slapped in the face by the market, wasting those ten years of my life.

This probability does exist, but I believe it is very small, so I still choose to bet on Bitcoin.

However, to prevent this probability from causing me excessive harm, my fundamental approach remains what I have repeatedly shared before: the money used to invest in Bitcoin is spare money, money that will not affect my life, money that, even if lost entirely, will not leave me destitute—I believe this is the most fundamental and safest way to stop losses and prevent trial-and-error costs from being too high.

I am relatively conservative, so I would never sell my house to buy Bitcoin like Zhao Changpeng did, and thus I am destined not to become a billionaire like him. However, I am very satisfied with my approach and do not envy such actions.

For assets like Ethereum that have mixed attributes, I will use various asset attributes to comprehensively assess its value: looking at it from both a commodity perspective and a platform cash flow income perspective.

However, because the crypto ecosystem itself has not been around for long, there is still too little historical data to reference, so my judgment on Ethereum is still largely subjective: I believe in the future of the crypto ecosystem, believe in the future of Ethereum, and after comparing Ethereum horizontally with other platform tokens, I have more confidence and assurance in it, thus believing that as long as it does not make some fundamental mistakes, I choose to bet on it.

But such a bet could also be wrong, and I might be slapped in the face by the market ten years later.

To prevent such mistakes from causing me excessive harm, my fundamental approach is the same as the method I used for Bitcoin: the money used to invest in Ethereum is spare money, money that will not affect my life, money that, even if lost entirely, will not leave me destitute.

For tokens that only have governance functions, my current approach is very simple, and there is fundamentally no trial-and-error cost: I absolutely will not actively spend money to buy them, no matter how much the market hypes them up; I don’t mind missing out.

Of course, I will keep any tokens airdropped to me to observe their future performance.

For tokens with certain utility or equity attributes but are actually vaguely defined, I will increasingly evaluate their potential value based on their attributes.

For example, if certain tokens are used as "currency" within their platform, I will closely monitor whether this platform has financial reports every six months or a year to show its revenue cash flow.

If not, I will be cautious about this project; even if I participate, I will only use a small amount of funds. If there are reports, I will assess whether its cash flow revenue justifies its token price, and I will also compare this token with those from other similar platforms to see if there are any particularly outstanding features.

If after such comparisons I find the price reasonable, I will tend to continue holding; if I find it too high, I will sell part of it.

However, there is still a subjective aspect to this, but I believe that by using this method, if a project has serious issues, it won’t take long—about one to two years—to discover its problems and sell to stop losses. In the future, when encountering such tokens again, I will participate more cautiously; if the price is too high, even if the market is hyping it, I will choose to wait and would rather miss out than rush in blindly.

Similarly, the most fundamental way to prevent trial-and-error costs from harming myself with these types of tokens is still to use spare money and pay more attention to position control.

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