Original Title: How I Built 8-Figure Wealth in Crypto (And Aiming for 9)
Original Author: @WarrenNakamotoX, Crypto Investor
Original Translator: Rhythm Little Deep

Editor’s Note: This article shares the author's experience on how to achieve eight-figure wealth through cryptocurrency, with an aim for a nine-figure goal. The core focus is on designing a long-term compound interest investment portfolio, emphasizing discipline, patience, and realistic expectations. The author consistently outperformed Bitcoin by holding Bitcoin, borrowing funds for short-term trading, investing in cycle champions, and angel investing, while also protecting against downside risks. The key to success is focusing on one's circle of competence, avoiding the chase for short-term profits, and enjoying the investment process, ultimately achieving steady wealth growth.

Here is the original content (reorganized for better readability):

What is the best thing cryptocurrency can give you?

= Life-changing returns

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

= All the profits you ever made

I know why you are here, for the same reason as me:

= To make money. Life-changing money.

We know it’s possible because we’ve all heard those success stories. But to be honest, you’ve also heard about those who lost everything in cryptocurrency and never recovered.

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

What is the true formula for success? How to avoid "losing everything"?

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

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

• The global stock market is currently $126 trillion,
• The global bond market is $140 trillion,
• The real estate market is about $400 trillion,
• While cryptocurrency is only $3.5 trillion.

Bitcoin (BTC) is already one of the top five assets by market capitalization, and I wouldn’t be surprised if it becomes the number one asset in the future. In the next 24 months, I believe Bitcoin will surpass Microsoft, Nvidia, and Apple, becoming the second-largest asset globally.

But unfortunately: If the market continues to grow and you are still losing money, there is definitely a problem. It could be that your approach is wrong, or your strategy or skills need improvement.

In any case, something needs to change.

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

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 reasonable goals.

I reached eight-figure wealth not because I’m a genius, but because I set realistic expectations. Before entering cryptocurrency, I had over a decade of experience in the stock market. My goal was simple: to achieve a 40% annual compound growth rate (CAGR). After seven years of compounding, my capital multiplied tenfold. I did it, and I was incredibly proud.

I know that for most cryptocurrency traders, hearing a 40% annual return sounds like failure, but at that time, it was already top-tier. The greatest investor in history, Warren Buffett, has averaged a CAGR of only 19.8% since taking over Berkshire Hathaway in 1965.

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

But can you maintain a 19.8% return year after year for 60 consecutive years? Through wars, market crashes, economic recessions, and chaos?

That’s true strength! It’s not about those fleeting massive returns, but about quiet, boring, and consistently outperforming the market.

In the stock market, how do you determine if your returns are good?

= By consistently outperforming the market.

What about in cryptocurrency?

= By consistently outperforming Bitcoin’s performance.

You might ask, why outperform Bitcoin? Because if you can’t do that, what’s the point of investing in other coins? You might as well just buy Bitcoin and relax.

Just a reminder, Bitcoin has increased more than tenfold in the past five years. Do you know how many people lost money during that time? Many. If they had just bought and held Bitcoin, their return would have been 1000%.

Regarding outperforming Bitcoin, for example:

• If Bitcoin performs +30% this year and you earn +40%, you are doing great.
• If Bitcoin drops -25% this year and you only lose -15%, you are still doing great.

To measure this, you need at least 5-10 years of performance to judge whether you are good at it. So, as I said before, this is a long-term game.

This is a game of patience, a snowball game.

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

The answer is portfolio design.

• Design for durability;
• Design for compounding;
• Design to protect against downside risks while seizing upside opportunities.

Even if you lose, there is still a great chance to win in the long run. This is the philosophy behind how I build and design my portfolio.

Now, let’s talk about how to actually outperform Bitcoin.

First, ensure that your portfolio holds 100% Bitcoin. This way, you automatically match Bitcoin’s long-term performance.

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

Short-term trading, maximum 3 months

I only engage with projects that have strong fundamentals and can easily achieve 2-3x returns, usually projects that have dropped during a bear market but still have solid products. I typically exit at 50%-100% profit.

For example, if you’ve followed me: $ETH, $PENGU, $ANIME, $COOKIE, $KAITO, and some I haven’t publicly mentioned: $HYPE, $RAY, $JUP, $SUI.

I actively accumulate during bear markets, selling after making 50%-100% profit. When the bull market arrives and all coins hit new all-time highs, I usually stop trading.

$KAITO and $HYPE are my key projects for this cycle. But when they drop, I sometimes add to my position and engage in short-term operations.

Cycle champions, high-conviction investments for a single cycle, maximum 12 months

This really makes me happy. Currently, I allocate up to 10% of my funds, but before reaching eight figures, I allocated nearly 20%. Early success stories include $UNI and $CAKE, at which point I hadn’t yet named this strategy "cycle champions." Last year, I participated in the TGE (Token Generation Event) of $HYPE, achieving a tenfold return within a month. Now I hold $KAITO, which has already doubled and remains strong.

Cycle champions have two conditions: "screening" and "timing."

The screening criteria are high-quality founders with rapid growth, strong communities, products that are actually used, and projects that are gaining attention while still in their early stages.

In terms of timing, I only start looking for opportunities in the first year after Bitcoin’s halving, exiting at most two years later. This rule hasn’t changed, but there may be adjustments in the future.

Angel investing, maximum 24 months

The only reason I created this X account is to gain better angel investment opportunities. So far, it has been effective; through friends I know, I have come into contact with excellent project teams.

I am currently supporting over 15 projects. I know this is high risk and high reward, but this capital comes from borrowing profits, so I don’t see it as a loss. I have indeed invested in a few bad projects, but overall the returns are still good.

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

What if my trading and cycle champions perform poorly? First, your portfolio isn’t dead; Bitcoin is still supporting you. If Bitcoin continues to grow, you can borrow more funds to keep playing.

Your portfolio will only fail under the following circumstances: you borrowed 50% of your Bitcoin, all your operations went to zero, and Bitcoin dropped 50%. You would have to be extremely unlucky and make mistakes at every step to encounter such a combination.

That’s all my operations. I don’t play with low market cap meme coins, don’t trade NFTs, and don’t engage in perpetual contracts because I’m not good at it. I’ve tried to learn, but I found it’s not my area. If you are good at it, you can borrow against Bitcoin to do what you excel at. Focus on your own circle of competence; everyone has different skills.

What matters most to me is: I love my life. The way I design my portfolio ensures that I can sleep soundly, enjoy each day, do what I love, and never feel stressed about investing.

Even when I started my Web3 journey in 2017, the goal was never to get rich quickly, but to slowly but surely accumulate wealth while enjoying the process.

In 2017, I decided to achieve $100 million in wealth by 2030. Not by luck, not by gambling, but by building a bulletproof system that compounds over time. I feel I am currently on the right track, which is why I am here to share everything. You don’t need to copy 100% of it; just choose the parts that fit your risk, life, and goals.

I share this not because I think I’m amazing. I am still in the learning phase, working hard every day to keep up with this rapidly changing industry. I hope you can learn something from this article and find useful methods to improve your portfolio performance.

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