• Selection, Meme, shorting, Solana, mysterious GCR… We talked about a lot of things.

Host: Nathan, founding partner of 7UpDAO

Guest: Shu, senior secondary market trader

Editor's note: This conversation took place in March of this year and is being released now because many of his predictions have come true. In 2016, Shu left ByteDance's international department to become a full-time secondary market trader in the cryptocurrency field. He infiltrated the well-known GCR community and bought Solana at $9. We talked about selection, secondary investment philosophy, Meme, VC coins, shorting, Solana, and the mysterious GCR.

Experience of entering the circle

Nathan: What was your experience entering the circle? What opportunities and stories have you had in the past few years?

Shu: In 2013, when I was studying in the United States, I heard that a friend had bought Bitcoin and started mining. I paid attention to it but didn't buy any at the time. Later, in July or August of the same year, I saw a popular figure on Renren talking about Bitcoin. This piqued my curiosity, and I started paying attention to this field and later bought some Bitcoin. At the time, I was still a student, so I only used pocket money to buy a small amount. I remember very clearly that the price of Bitcoin soared from $200 or $300 to $700 or $800, and by the end of November, it had surged to $1,000. However, the price then experienced a significant drop in December. Although I was just investing for fun at the time, I later realized that this experience played an important role in my growth, especially in 2016 and 2017.

In 2016, after returning to China, I joined ByteDance for internationalization. One day, I noticed one of our engineering colleagues browsing a Bitcoin-like altcoin exchange website. This reminded me of my experience in 2013 when I had also bought some similar cryptocurrencies like Litecoin and Ripple. Because I hadn't sold them, their prices had increased many times over. This could be considered my second foray into this field.

In 2016 and 2017, I made some money from my initial investments, and some of them multiplied significantly. Many friends issued coins, and some friends joined Binance, and so on. I remember in December 2017, BTC reached $20,000. In January 2018, there was a crazy surge in altcoins, but about 2-3 weeks later, the prices started to decline. At the time, I had a mindset that was completely non-trader, didn't understand how to trade, just bought and made money. Then I invested in new coins, and later lost most of the money I had made because I didn't know how to trade or read charts.

The real turning point came in March to April 2021 when the cryptocurrency market became active again. However, on May 19th, Huobi and many other exchanges suddenly liquidated, causing me to lose millions of dollars in a single day, which made me very frustrated. In April 2021, I also noticed some trader KOLs on Twitter. Because of my limited knowledge in this field at the time, I followed many of them. I followed someone I thought was pretty good, named GCR. He had issued a warning at the end of April, but at the time, I didn't know how good he was. Because you have to follow a KOL for a while to know if they are good or not.

In July-August 2021, I was in a period of recuperation because of the huge loss I had experienced, which made me feel very uncomfortable. At that time, I began to systematically learn various trading techniques, almost from scratch, including learning about candlestick charts, and more importantly, I found that there were many excellent English-speaking traders on Twitter. However, it was a big problem to distinguish them from many KOLs.

For example, during the 2017 cycle, the biggest lesson I learned was that most of the Chinese KOLs were of poor quality. The reason is actually very simple, you can see it in the A-share market or in some experiences in China over the years, because there are so many people in China, including the digital maniacs in 2017 and so on. Many people made a lot of money and had a lot of fans, and for them, the easiest way to make money was to fleece their fans, rather than provide some alpha to them. I think this is very different in the United States. Although there are also fleecing in the United States, there is indeed a very small number of people who are truly outstanding, they don't set up paid groups, but share truly useful information. But it's very difficult to find such people, you might only find one in 1,000 Twitter accounts. The key is to learn how to find them, so at that time, I spent a lot of time observing.

By August-September 2021, I really started to pay attention to some people worth following, my trading skills gradually improved, and I started to make profits, gradually making up for the losses. I remember in October 2021, GCR predicted that the Bitcoin futures ETF would be approved soon, and he posted a message on Twitter saying he was going to create a "ReBirth DAO." I rushed in within the first ten minutes of seeing this post. Later, the post was closed within an hour, and he created a Discord group. After joining, I started to communicate with many Western traders, understanding their trading styles, and found that their styles were very different from ours. Gradually, I also got to know some very excellent traders on Twitter.

As for GCR, his full name on FTX is very long, GCR is just his abbreviation. He ranks high on the profit list on FTX, probably in the top two or three if you don't consider institutions. He is a very outstanding trader. His track record on Twitter is that if he posts 100 times, maybe 99 of them are accurate about trading, so his hit rate is the highest, which is actually the most important principle in our trader community: you can't post analysis after making a lot of money, that's "hindsight bias." Many of the English-speaking fleece groups in China are like this. But GCR usually gives predictions in advance and sometimes provides specific trading points. However, he is not very active in the public eye now, more in our small group for communication.

Nathan: Are you now a full-time secondary market trader?

Shu: Full-time secondary market trader, because I basically idolize GCR, and many of his trades have indeed been accurate. He actually said at the peak of 2021 that during the crypto bull market, you shouldn't do anything else, you should be fully committed, trading and learning 24 hours a day in front of the computer. In a bear market, you should start building relationships with various projects, depending on whether you are engaged in primary trading or working for a project. Fully committing to trading during a bull market is an important opportunity to gain alpha returns, and such opportunities may only occur once a decade in the cryptocurrency field.

About investment style and approach

Nathan: What kind of style and approach do you have as a secondary market trader now?

Shu: My trading style is quite aggressive because most of it is my own money, so I definitely want high returns, so my risk preference is relatively high, definitely leaning to the left.

In the left-leaning category, there are actually two types. The first type is technical traders who focus on charts, various quantitative indicators, and trade based on a combination of long/short ratios and analysis. The second type is narrative traders, who focus more on the stories and emotional factors behind the market. There is a lot of discretion in this approach. I mainly use a narrative trading style with some quantitative analysis, but quantitative analysis is not the most important part of my strategy. In the cryptocurrency market, due to the relatively small number of participants and the close relationships between regulators, exchanges, and large holders, the market is not as fair and transparent as traditional stock markets. Therefore, many technical indicators may be ineffective or severely lagging in the crypto market, unless you only focus on mainstream coins like Bitcoin and Ethereum.

So, I mainly focus on left-leaning, narrative-driven trading, with a small part belonging to insider trading. For example, during the bear market, in GCR's group, there may be 5 or 6 people, and their orders may start at $3-5 million. However, they usually do not directly disclose specific order amounts, but rather give a general direction and hints.

In the crypto trading community, including our group, there is a unique jargon and password system, so outsiders may not understand it. Many times, if you create a fund, it will definitely require stability. If the drawdown is too high, it won't work. Stability is the first priority, such as allocating BTC+ETH, plus 20%-30% in SOL, and 5%-10% in Meme coins. But if I feel that a Meme coin is taking off, I might allocate 50-60% and use leverage, so it's definitely different.

Nathan: So, to summarize, your trading style is primarily left-leaning, and in making decisions about a particular coin, there may be more narrative, trend, turning point, and event analysis components?

Shu: Yes, there are many influencers on Twitter, such as Willy Woo (@woonomic), who has a significant impact on the market and is very famous with a very high hit rate, probably one of the most influential public speakers at the moment. There is also Anatoly (@aeyakovenko), who is the Co-founder of Solana Labs and a spokesperson for the Solana ecosystem. These major KOLs are one part, and the other part is more technical, analyzing the order book and various outflows and inflows on Binance or Coinbase. I also look at some macro factors, but in reality, macro factors are not that important because everyone knows that the market will strengthen, it's just a matter of how strong, and there is definitely a difference of opinion here.

Specific to a project, such as Solana, or other coins, I will see if I have some internal connections or information. These connections must be internal to the project, and if they are not from the project or not in a core position within the project, the information they provide may not be accurate. The most important thing in crypto is to determine at which level your information is in the information pyramid. Most people are not able to accurately judge this. They may think they are at the second or third level, but in reality, they may be at the fifth or sixth level, so they are much slower, and once you are slow, your trade becomes useless because the volatility in crypto is very fast.

Lastly, 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 objectively collect these signals, such as counting the number of mentions by all major KOLs, and then trade based on this, your trading performance may be very poor. Because most KOLs are trying to attract more fans, and most fans do not understand trading, so they often buy high and sell low. Although buying high and selling low may be good at certain stages, such as when a KOL posts a tweet, if you follow within 15 minutes, you may find that your performance is very good, but many people may enter five hours later and end up losing. It is very time-sensitive.

Nathan: In terms of asset prices and FDV, do you have any preferences for selecting and trading?

Shu: I have preferences. I have different levels of allocation. In terms of mainstream coins, I first bought Solana in January 2023 at around $9. This is because GCR has always been bullish on Solana, as I mentioned last time. For example, BTC, ETH, and some other L1 assets, in the allocation of other L1 assets, I definitely have the heaviest position in Solana, because its liquidity is good enough.

The second level is meme coins. Meme coins also have levels. The first level is OG, such as Doge and Shib from the previous cycle. The second level is chain-specific meme coins, divided by different chains and ecosystems, such as Solana's Wif. We bought Wif at around $0.26, and it increased by about ten times. Then there are pure meme coins, such as Pepe, which may be considered part of the Eth ecosystem, but I see it as a meme coin without a specific chain. Meme coins can also be divided by different themes, such as whether they are dog-themed or cat-themed. If many dog-themed coins have market caps of over a billion dollars, then shouldn't there also be several cat-themed coins with market caps reaching a billion dollars? If you extend further, what is the third most popular pet? If you can figure out the series of questions, if you guess correctly, it may be very valuable. Overall, we think that in this bull market, it's really about two things: either buy the most mainstream and strongest layer 1, or bet on meme coins.

Nathan: Is the categorization of meme coins based on different animal attributes within this quadrant highly correlated? For example, if dog-themed coins already have an OG valuation system, will the valuation of cat-themed coins necessarily be compared to and anchored to the dog-themed coins, and is there value support for this?

Shu: No, you can only look at it in the broadest sense. For example, if the valuation of a dog-themed coin reaches $4-5 billion, then it's very possible for the valuation of a cat-themed coin, even if it's not as popular, to reach a billion dollars, which would be about one-eighth of the valuation of the dog-themed coin.

Nathan: How do you view the performance of Solana's meme coins in this bull market, which often outperforms ETH's meme coins? Is this related to the influence of funds and traders in different regions not being as strong as in the United States?

Shu: I think the reason is actually very simple. Two or three weeks ago, I tried to buy some meme coins on ETH, and the gas fees were very high. As someone who came from a traditional internet giant like 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 on Solana, it might be 2-3%, so of course, I would choose Solana. And most people, when they buy, are not going to deposit one or two thousand dollars, but rather $100 or even tens of dollars. So when they deposit, and see that they have to pay $30 or $20 in gas fees for a $50 deposit, they won't deposit. This is the most direct reason.

Another reason is that Solana has already made some headlines in this cycle. In addition to the price increase, it has a lot of exposure in the United States. If you are in the US, you may have already come into contact with its physical stores, phones, and so on, so whether you are inside or outside the circle, you actually have some degree of exposure. If Solana is bullish in many aspects, naturally people will wonder what's behind it. This is a more logical way of thinking.

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

Shu: They will definitely launch, but I won't buy. This is another misconception. People like to buy things that are catching up, I never buy things that are catching up, I only buy the fastest runners. This is also something I learned from GCR. You should always focus on the coins that are running the fastest. Your only job is to find out which ones are running the fastest in this meme cycle. If you didn't get on board at the beginning, then find the right time to get on board, like buying on a pullback. You shouldn't buy new things that are catching up, or you can only allocate a very small portion to those catching up. Because catching up things are essentially not very competitive with your market maker or the project.

If your market maker is very powerful and has the most accurate judgment of BTC or the entire market, shouldn't you be leading instead of catching up? Or, for example, if you are starting a business and you are one of the first to get funding, but if you are not successful in the first round of funding, it can only mean that you are not reacting fast enough, and being slow in such a capital-efficient market like crypto has countless drawbacks. Because in crypto, everyone is fighting for attention, but attention is actually not proportionally gathered. For example, Bome may be able to grab all the attention in a day, but this is all backed by big investors. We look at the price increase curve, including the words of the calls, the price increase so much in one or two days, this kind of thing is not a miracle, I don't know why many friends believe this is accidental, it has never been accidental. For example, at the time of Solana, when we saw the price reach $9, we roughly calculated that it could reach $18 in January, and we all budgeted for it. Basically, at that time, our group probably gathered $3-4 million, 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: Personally, I don't touch any tokens that are mostly held by VCs, unless the VC has been washed out, like Solana. The reason is also very simple, VCs rely on taking rich people's money to invest, so the pressure is not that great. For example, a VC fund may have $300 million, but it's not their own money, so their motivation is not that great. The big traders in our group, whether they take other people's money 10 or 20 times, or their own money, are completely different. So I don't pay attention to anything VCs say, I pay more attention to how ordinary people think.

Secondly, I pay attention to how the real powerful houses think, such as the biggest market makers for BTC, BlackRock, Jane Street, and so on. To some extent, VCs are just pure bulls, because due to their work nature and cognitive genes, they will only call for bullishness. If they don't call for bullishness, they won't be able to raise funds. It's hard to say whether this kind of one-sided bullishness is true optimism or false optimism to deceive LPs, but this kind of one-sided bullish rhetoric 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 longing. A large part of the money in crypto is made by shorting. It's certain that BTC will have a 50% drawdown in the future. If you find the right time to short with double leverage at the top of the bull market, you can make a lot of money, and you don't have to worry about the pullback, but your margin needs to be sufficient (this is not financial advice). Also, shorting must be done on the right side, and you shouldn't go all in, and you shouldn't try to guess the absolute top. However, ordinary people should not short easily, shorting requires a lot of skill. But someone who is 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 when shorting, and secondly, you need to ensure that your margin is sufficient, because sometimes you need to use leverage. I remember in 2021, I shorted a small coin on a certain exchange, and the price of that coin surged 15 times in one hour, and I got liquidated. This is not good for the exchange either, because such a drastic price fluctuation within an hour will seriously damage the reputation of the exchange. Generally, this kind of situation is not tolerable. If a coin surges by 3 to 5 times within an hour, it means that the exchange's liquidity and order depth management are not in place. Exchanges like Binance hold 30% to 40% of the supply of a coin and act as market makers themselves, so even if the price fluctuates, the surge within an hour won't be that big. You will find that on Binance, it's common to see a 2 to 3 times surge in a day, but a 10 times surge within an hour is very rare, it hasn't happened in the past two or three years. A 10 times surge within an hour will lead to many people getting liquidated, and it also indicates that the exchange has very poor seller liquidity and not enough selling pressure. Of course, I have some friends who have been liquidated on Gate and other exchanges, with a surge of two to three times within an hour. They are all very skilled traders in the group, so later we didn't use that exchange anymore.

I think some exchanges with Chinese backgrounds are a bit careless. 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 someone lose all their money in an hour? The best management is to let the gambler lose slowly.

Discussing "Shorting" and Leverage

Nathan: From the perspective of ROI and taking risks, what is a good range to control leverage in general?

Shu: Leverage depends on the coin, and then it depends on your conviction for this trade. For example, if you think this is possibly the absolute bottom, or close to the absolute bottom, I might use 7 or 8 times leverage. Generally, I avoid using leverage of more than 10 times, because a 10% drawdown is very common, and you could say that a 10% drawdown is to liquidate those positions with 10 times leverage. 7 or 8 times might be the highest I've used, usually it might be 4-5 times. Also, it depends on the position, for example, if I have a lot of money in the position, then maybe 2 or 3 times leverage. If a trader tells you that they often use 20 times leverage, either their position is not large enough, so it doesn't make sense, or the guy is not far from getting liquidated. Because in crypto, any coin, if it has a 5% drawdown, it will liquidate 20 times leverage. BTC has a 10% drawdown, so 10 times leverage will be liquidated, right? In fact, 10 times leverage, many coins are easy to get liquidated; many small coins may have a 30% or 40% drawdown, so 3 or 5 times leverage will be liquidated. And generally, positions cannot be fully added at once, they are added slowly.

The Story of Buying Solana at $9

Nathan: Please explain why you dared to buy Solana at $9?

Shu: Yes, I bought it at $9, and later the price rose to $18 or $19. I think the first opportunity was FTX's bankruptcy. When FTX went bankrupt, many people lost a lot of money. After FTX went bankrupt, I didn't really try to recover the losses for almost a month, until early December, when my emotions gradually calmed down and I started to gradually pay attention to some things. At that time, GCR created a small group in mid-December, and about 50 people joined in the first five minutes, including us, and we had some discussions. GCR said that the end of November might be the lowest point, the market was at an absolute bottom, and he predicted a huge rebound in 2023 and the start of a bull market in 2024.

Here's an aside, GCR has made many accurate predictions, such as predicting a 90% chance of Trump being elected as the next US president in mid-2023, which is actually very likely given the current trend. GCR bought Trump's meme coin at $0.1 or $0.2, and last week he said that this token has already made a profit of over $35 million (this conversation took place in March of this year). He also predicted that Luna would crash, predicted the emergence of friend.tech, and predicted many other things. He is one of the strongest traders in history, without a doubt.

Generally, ETH's competitors will rise more than ETH, and in this cycle, Solana is still the biggest competitor to ETH. First, Solana raised the most money among all ETH killers; second, Solana is relatively Americanized, named after a beach in San Diego, and several of its founders are from Qualcomm, which can be found on LinkedIn; third, Solana's ecosystem has produced some attractive things, such as StepN and some wallets developed by third-party developers, and their team is very Americanized, relatively elite. Another important reason is that when I went to New York, they had an offline store. In June or July 2022, when I returned to the US, I found that they had opened a physical store here, which proves that their financial strength is still very good. Otherwise, they wouldn't have opened a store during that bear market. All of this proves 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 Ethereum's Hackathon, and I felt that Vitalik Buterin's state was completely different from a few years ago. He had several private bodyguards and felt a bit like a deity, as if he had no motivation. GCR often says, why would a coin pump? Because it has motivation. A team without incentive will find it very difficult to succeed. I think Ethereum lacks motivation, including Vitalik and other Ethereum OGs who have rested for too long, just like Tencent and Alibaba, they can't compete with new competitors. These reasons led me to think that Solana is better than Ethereum, and at the time, we calculated that most of Solana's supply had been eaten up by FTX.

I remember in April or May last year, GCR judged that the BTC ETF would definitely be approved, but didn't know the timing of the approval. So all the washing before this timing is normal. And once this timing has passed, if you buy Solana within two or three weeks, you will find that its price is still very low. Also, when emotions reach the point of fearing the most, generally there will be a rebound, this is the experience of crypto. The counterfactual is not necessarily the best trade, but the best trade is definitely counterfactual.

Nathan: Luna is also counterfactual, so why not buy Luna?

Shu: Luna's bankruptcy is different. Luna's situation can be calculated mathematically, it's not sustainable. The case for Solana is different because after FTX went bankrupt, Solana experienced a huge sell-off, and after stabilizing in 2022, it proved that most of its selling pressure was gone. We looked at the selling pressure on the order book and observed it for a long time, about two or three weeks, and found that the sell wall of the selling pressure was very low, and it only needed a little buy pressure to push it up. If you believe that FTX is the biggest catalyst, and there is no more bearish scenario than this, then actually BTC has bottomed out, so once BTC stabilizes or rebounds slightly, which coins will rebound the most? This is a very big alpha.

Nathan: Do you think Solana's FDV will surpass ETH's?

Shu: I think it might be a bit difficult for Solana to flip ETH. Because we believe that the approval of the ETH ETF is basically a done deal, it's just a matter of time, it's not a question of if but a question of when, so after the approval of the ETH ETF, ETH will also have a rally. Solana will definitely also be approved, but we don't know if it will be in this cycle or when in this cycle, so it doesn't have the legitimacy and traditional big money in, so we don't know how long it can rise. Therefore, I think it's quite difficult for Solana to flip ETH in this cycle. I think the ETH ETF will definitely be approved in this cycle, and with traditional money help, can Solana flip ETH? It's very difficult, because the scale of traditional funds is not at the same level. (This conversation took place in March of this year, when the market was in a fud sentiment towards Ethereum.)

The second reason is that Ethereum has a much longer history than Solana, and you can see that it's very difficult for later coins to flip earlier coins in the rankings on CoinMarketCap. For example, Ethereum may have been bought by whales very early, and they don't care whether the price of Ethereum is $3200 or $4000. If they keep holding, it means they may not have selling pressure and selling incentive, because they are not traders.

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-scale traders, with assets ranging from several million dollars to even billions of dollars. GCR's standards are therefore very strict, requiring rigor in every word. 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 re-elected. For all discussions, we approach 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 become an excellent trader, which means you will have higher demands on yourself and your surroundings. Of course, this depends on personal choice, but if you choose this path, you must demand strictness from yourself to ensure that your words and actions are rigorous. For example, sometimes GCR will use coded language, mentioning a certain time period or a certain type of coin, and you need to research and understand what happened during that time and which coins may be affected. Big traders usually won't tell you directly, but will give some hints that you need to interpret 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. From our summary of European traders: first, Europeans may have a unique sense of confidence; second, many of their cognitive and cultural preferences may be due to the sparsely populated areas, and Europe always has a bit of a cynical feeling. Europe actually doesn't have much influence on the market, although there are also good traders in Europe. The biggest influence on the market is still American traders, including Wall Street, and so on. We say that the BlackRock CEO saved the ETF approval. Otherwise, the bull market cycle wouldn't have come so quickly.

The weakness of Asian traders is that most of them don't have a deep understanding of American culture, and secondly, because homogeneous thinking is particularly severe, possibly due to collective education. This is not only in China, but also in Japan and South Korea. When a coin rises, everyone chases after it, but what everyone is competing for is operational excellence, the ability to enter and exit quickly, but it's still very tiring to make money. It's best to follow a big trend, such as buying into Solana at a very low price and holding onto it, which is a style that American retail investors like. Holding onto it and then selling at 10 or 20 times is much easier than entering and exiting quickly, and it's also better for the trader's mindset and physical health.

Nathan: How do traders from different regions rank in terms of market influence, in the food chain or disdain chain?

Shu: In my observation, Europe has a slight advantage over Asia. The first is because they are relatively closer to white culture, and relatively able to understand some American culture, and European traders have a big advantage in that they don't have the collective thinking that Asians have. Europeans, like Americans, are not influenced by collective thinking, and are more independent thinkers compared to Asian traders. The second point is that Europe has a certain advantage in terms of time zones. In the Asian and American time zones, traders have a period of wakefulness. You will find that from the last cycle to this cycle, many coins have had big rises and falls, and many times it's in the early morning in China, which is very unfavorable for Chinese traders or Asian traders. But recently I've seen that some mainstream coins actually perform better in the Asian time zone, but this doesn't mean that Asian traders are good, because I know that some American traders have moved to Asia.

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

Shu: Some of them move to Asia mainly because of the cost of living, as well as food and other aspects. They can live like kings in Asia for the same amount of money. But they won't stay there for a long time, maybe for a few months or half a year, as a way to relax as a trader, because it's hard to relax in a familiar environment, but in a new environment, you may have to learn and adapt.

When trading, you can't stare at the screen every day. For example, in a bull market, there are also big pullbacks, such as a 20% pullback. If you stare at it every day, it's easy to make impulsive trades, such as trying to catch a falling knife. So rhythm is very important. When there's a 20% pullback, you don't know if it will pull back 25%, at this time it's best to take a vacation for a few days, and then come back to observe. Don't try to guess the bottom. I've seen many Asian traders try to guess the bottom, and it messes up their mindset. When it goes up, they regret not buying earlier, then they chase after it, and when it pulls back again, their whole mindset is messed up, and their overall profit for the bull market cycle may be greatly reduced.

Nathan: How to solve the mechanism for earlier and better discovery? 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, making 1000x or 2000x on certain coins, or that these people can't form a methodology, at least you need three or more sample cases to form a rule, but this kind of thing generally won't exceed two.

I've seen all kinds of stories in countless coin trading groups, but after reading them, you can just laugh it off. You have to strictly control your information input, just like what you eat every day. If you eat pre-made food every day, how can you be healthy? I basically only follow two or three Chinese KOLs, and all the others are English KOLs, so my sources of information are very clean. Including the content I see on WeChat, I've quit all other groups because you will become a reverse indicator. I've also been on 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 everything you see is alpha. Or at least strive for the maximum alpha, which is very important.

Another common mistake is that some people think it's beneficial to leave a few negative examples, but in reality, this is very wrong. For example, there's a person in the group named Alex, who once made two or three hundred million dollars in the last cycle and became the number one on the FTX trading platform profit list. But then he lost tens of millions of dollars in a few days. He shared an experience that is worth learning from: the wrong negative is not necessarily correct, so the concept of counterexamples is not valid, there is no such thing as a counter indicator.

You have to spend a lot of time in front of the screen, and you may have to track many calls from a KOL for a long time, such as a KOL who is a trader, you have to remember, if you can't remember, you can use Excel to record. Remember if many of the calls from these traders are accurate, if out of ten early calls, you can basically get seven or eight right, then you follow them, and focus on a similar class, this may be a method.

In addition, I've found that really good traders are introverted personalities, not extroverted, and their speaking style has a big ego. A big ego doesn't necessarily mean a good trader, but most traders have a big ego. It's because they have a big ego that they attach great importance to every word they say to the public, and they are responsible for their statements. In the GCR group, we count how many sentences you say each week, and you are forced to make several price predictions each week, and you will be judged based on the predictions. The bottom 20% will be kicked out each week. In summary, first, control your information input; second, find your own alpha following.

Discussing Future Trends

Nathan: How do you see the market trend and rhythm in this bull market cycle?

Shu: We traders only talk about things with a high degree of certainty, and I'm not too confident about specific timing. Because I speak conservatively, I can only say that I'm sure it will be a bull market in 2024, but I'm not too sure about 2025. It might still be in the first quarter of 2025, but after that, I'm not sure. In terms of price levels, some people say that BTC will reach around 200,000 or something, but I think that's a bit too bullish. Although it's possible, to be honest, I would be very happy if it reaches 100,000. Because 100,000 is a big psychological threshold, and many people may underestimate this. 100,000 is a six-digit number, and we are all in the five-digit range now, so this is a breakthrough in psychological level, just like the meme coin going to zero. I suspect that most whales will have a sell-off near 90,000 or 100,000. At that time, it will depend on how the recovery from the sell-off goes. So I think reaching 100,000 is good enough, and above 100,000 is of course better, but it doesn't really affect me, because when it reaches 90,000, I may start to gradually reduce my BTC holdings and play more with altcoins.

Nathan: How about the trend of Solana?

Shu: Solana is now over 190 (this conversation took place in March of this year). I think doubling to 300 or 400 is no problem. I'm still quite conservative. In the last bull market, BTC's ATH was over 60,000, and if it goes up another 50%, it's probably around 100,000. In the last bull market, Solana's ATH was 260, so I conservatively estimate an increase of 50% or 60%, which is probably around 400, maybe even higher, because if BTC goes up 50%, Solana's elasticity will definitely be more than just this increase.

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