Author: Leo, Crypto Trader

Translated by: Felix, PANews

In the current downturn of the crypto market, the community is in despair. Many traders may have fallen into trading difficulties, losing hope, and even leaving the crypto space with their capital wiped out. However, the experience of anonymous trader Leo may bring you some motivation; without the lows, the highs wouldn't be so dazzling. Here are the details.

It was August 2020, when the panic of the COVID-19 pandemic was spreading everywhere. After finishing my freshman year, I returned to my childhood home for the summer, extremely bored, and spent my time watching YouTube videos.

I remember that moment clearly because it changed my life. I saw an advertisement featuring a Chinese-American who claimed to have made $20 million in his first year of e-commerce. This ad struck a chord with me because he was a young person just out of college, in his early twenties. I clicked the link and watched his video course, and from that moment on, I became obsessed with making money online.

At that time, I couldn't afford the course (it cost $2,000, and I probably only had $500), but I found a few Indians on an informal website and bought the course for $20. Since then, I have tried various online businesses, but all failed. I tried dropshipping; I sold a dropshipping course through phone sales (this was my first exposure to making money online, selling a $2,000 course and earning a 20% commission); I even tried to establish a lead generation agency.

From each small success and failure, I learned a lot, but one of the most important takeaways was the accidental discovery of a realm on Twitter known as "Money Twitter."

Money Twitter opened my eyes because I could interact with many people in similar situations, either like me or in the position I aspired to be in. Before this, I had been going solo, and being able to make friends and exchange business ideas was invaluable to me.

Cryptocurrency

In May 2021, a mentor I greatly respected began posting daily about cryptocurrency, especially Ethereum, claiming it would change the future of finance. At that time, I was a 19-year-old kid easily influenced, so over the next few months, I invested most of the money I made from my online business into Ethereum. My first purchase was the day before the infamous crash in May 2021, but I only invested a small amount. However, I kept buying that summer, and by August 2021, I had accumulated several Ethereum (worth $5,000 to $6,000), while my business had barely made any money during that time.

In August 2021, I got lucky. I invested those few Ethereum in MetaMask and spent 0.3 ETH (about $1,200) to buy an NFT. 0.3 Ethereum was a significant amount for me—my net worth was only about $10,000 at the time—but somehow, a voice told me I had to buy it. I am not making this up—just a few hours later, I sold the NFT for 3.5 Ethereum, netting over $10,000.

That was the most exciting moment for me so far. I had been struggling with various online businesses, barely scraping together $10,000, yet in just two hours, with a few clicks, I made that much. From that moment on, I knew I had found a new direction to explore.

I abandoned all other businesses, and from then on, I spent all my waking hours researching NFTs: hanging out on Discord, refreshing Twitter every second, obsessively checking OpenSea's floor prices, tracking newly minted NFTs, etc. This became my new goal, and I gradually began to excel in NFT trading.

By May 2022, I had turned the few thousand dollars I invested in ETH that summer into hundreds of thousands. I also got my brother and best friend involved in NFT trading, and the three of us succeeded together. During this time, I kept transferring money to my bank account. As I started making a decent amount of money, I left my hometown and moved to Miami, where I had made some friends while doing online business, and I wanted to step out of my comfort zone.

Overall, when the market began to slow down, my first round of operations was quite successful. I quickly realized that it was easier to manage risk by pricing in stablecoins rather than base currencies (ETH/SOL, etc.). However, the only mistake I made was converting about $100,000 worth of stablecoins into UST and depositing it into Anchor for a 20% yield, which ended up almost going to zero (UST depegged, which was confirmed to be a Ponzi scheme).

Falling into a "Ponzi Scheme"

In May 2022, I met someone on Twitter through a mutual friend. For the sake of convenience and to protect certain privacy, let's call him Jimmy.

Jimmy is a well-known figure on "Money Twitter," with many followers, and almost everyone respects him. I met Jimmy through a mutual friend because he urgently needed to introduce cryptocurrency into his sports betting business.

Jimmy said he had raised a lot of funds from investors for operations, but sometimes he suddenly found himself needing cryptocurrency to hedge against risks in the cash business. He explained that his sports betting "business" had been very profitable over the past few years, but cryptocurrency was holding him back from taking it to the next level. He even showed me many pay stubs for gambling profits issued in his name as proof.

The first red flag I should have noticed was: if his business was really that good, why was he looking for a 20-year-old kid who didn't even have much cryptocurrency? If everything was legal and compliant, raising a large amount of funds shouldn't be a problem. But at that time, I was just 20, a naive kid, so I believed him.

The market conditions were also not great. NFTs were basically dead, and I happened to have some cash (about $200,000) and was looking for a way to make money.

Jimmy said he could return my investment (up to $50,000) with a 10% return within 48 hours. I thought it was worth a shot, so I transferred him $25,000.

At the time, I felt the risk-reward was decent. Jimmy was a public figure with a large following on X, and he was said to be wealthy; scamming $25,000 would damage his reputation, which didn't seem worth it.

In less than 24 hours, Jimmy transferred me $27,500.

This clearly built a lot of trust in him, as I was almost blindly investing, and he fulfilled his promise, making me feel his plan was somewhat reliable.

A few days later, Jimmy said an "investor" was willing to transfer money to my bank account in exchange for cryptocurrency. He proposed that if I could transfer him the cryptocurrency immediately after receiving the transfer, he would send me $50,000, and I would give him $47,500 in cryptocurrency. It seemed like free money; why not do it? At least that's what I thought at the time.

We continued the transaction—money was transferred to my bank account, I sent him the cryptocurrency, and then I earned a $2,500 fee.

In the following months, I did many similar transactions with Jimmy. We conducted both over-the-counter trades and those where I directly provided him with cryptocurrency when he urgently needed funds, charging a fee. Most transactions went smoothly, with only occasional minor issues. For instance, there were a few times when his money transfer was slightly delayed, and once, one of his "investors" sent me money via PayPal, which ended up being frozen.

Overall, the collaboration was quite profitable, and by the time things started to go south, he had already brought me nearly six figures in income. Clearly, by this point, I had developed a lot of trust in him and fully believed his business was legal and compliant.

Turning Point

During a routine transaction, the promised $25,000 had been overdue for several days, but I didn't pay much attention because, as mentioned earlier, there were occasionally minor issues.

Jimmy suddenly called, which was the first time he asked me for money after already having my funds. He explained in detail that he was in a very tight spot financially, and if I could lend him another $25,000, it would completely resolve his issues, and he would give me a 15% return within 48 hours instead of the usual 10%. Given our previous collaboration, I thought it was easy money, so I transferred the funds to him.

At that time, I had about $200,000, so $50,000 was a significant amount for me, but I felt it was a sure bet.

Forty-eight hours passed, and he still hadn't sent me the money. Unsurprisingly, I began to worry, constantly messaging him for updates. He called me, vaguely saying that there were major problems with the business. I asked him to explain in detail, and he said it was too complicated for me to understand. He requested another week to resolve the issues and assured me everything would be fine. I was a bit worried, but at the same time, this person had always fulfilled his promises, so I didn't think this time would be different.

A week passed, and he transferred me $25,000 of the promised amount. He always came up with new excuses saying he needed to wait a bit longer, but at least he managed to scrape together $25,000, which eased my concerns somewhat. At that moment, for the first time, a thought crossed my mind: was he giving me this money just to buy time?

Weeks went by, and he continued with the same old excuses. At that time, I completely trusted him, so I patiently waited. However, just as the US Open was in full swing at the end of August and beginning of September, Jimmy called and revealed something different.

He boldly asked me for $100,000 in liquidity for the finals. He explained that he had been preparing for this final because Grand Slam finals are one of the easiest events to monetize in sports betting. He urgently needed another $100,000; otherwise, the plan would fall apart. He made me feel that his entire business depended on me giving him another $100,000. However, if I gave him this money, he would return all my funds within 48 hours, plus a 50% profit instead of the initial 15%.

Even though this was close to all the money I had, the promised "risk-free" 50% return seemed very tempting. At this point, I had already invested $50,000, and I trusted this person, so I decided to take the risk and give him $100,000.

Needless to say, 48 hours passed, and the money still hadn't arrived. Now I was starting to worry.

During a phone call, he said something went wrong on the day of the finals, and believe it or not, he shamelessly asked me for another $50,000 to cover the losses. This was basically all my assets. The worst part was that he knew how difficult my situation was and how he had pushed me into a corner; almost all my assets were tied up in his plan. At that time, I was in a terrible mental state, feeling that the only way to escape this predicament was to continue working with him. There was a bit of sunk cost fallacy and a bit of blind optimism, thinking everything would turn out fine, and I could help him while making a large sum of money.

So I foolishly gave him the money again.

I still had some scattered cryptocurrency and the bill money left in my bank account, but at this point, I was already financially ruined, with no way back.

Deep in Debt

As everyone might expect, things got worse.

Jimmy kept coming up with various excuses to ask me for money, and I kept giving him money because I genuinely believed everything would turn out fine.

Every time I transferred him more money, I became more determined to see this transaction through. Clearly, I had run out of money to transfer, so I had to turn to friends and family for help.

The first person I borrowed a large sum of money from was my brother. I initially introduced him to NFTs, and he made quite a bit of money, so he was more than willing to help me. Although he was skeptical about the situation, he had confidence in me, believing that I would find a way to handle things no matter what.

But the situation kept getting worse. Over time, I completely pulled him into this transaction—he also had multiple phone calls with Jimmy, and as a result, we both ended up losing everything. He fell into the sunk cost fallacy just like I did, and things got so bad that he started borrowing money from others to help me push this transaction forward. We found ourselves in an extremely dire situation, with all the responsibility on me since I was the one who brought this transaction to the table. In total, my brother transferred nearly $300,000 (including his own money and that of others).

I also convinced my roommate in Miami (who was my best friend at the time and still is) to invest all his savings (about $60,000) into this transaction, and he too ended up nearly losing everything, leaving only a little for daily expenses.

However, things got even worse. Of course, this money was far from enough to complete the transaction and realize profits, so I had to find alternative ways to raise funds. I contacted almost all the friends I knew on Twitter, even reaching out to some people I rarely communicated with. I made numerous phone calls, explaining the situation, but the vast majority were uninterested because it sounded too good to be true. The pitch I was selling them was that I needed a certain amount of money (usually $25,000 or $50,000), and I would return their principal plus interest within 48 hours. Each time I borrowed money, I was convinced that it would be paid back within 48 hours. I was so foolish and in a terrible mental state, completely believing everything Jimmy said. I told them that if this transaction failed for any reason, I would guarantee that I would pay them back no matter what. Among the people I contacted, there was a complete stranger who followed my Twitter account dedicated to NFTs, cryptocurrencies, and online business, and he ended up becoming one of my best friends and a crucial reason I was able to make a comeback. But more on that later.

This transaction became my sole focus every moment. I woke up with hope, expecting that today I would finally receive the money, only to get a call from Jimmy saying he needed to raise more funds, along with a bunch of lame excuses. I would then pace back and forth in the apartment hallway with my phone for six or seven hours, trying to raise money. For a few weeks, I averaged about 35,000 steps a day, all while pacing in the hallway with my phone trying to raise funds.

Sometimes, looking back, I realize that I was able to raise so much money just by talking, which is quite an achievement in itself. Even though the fundraising situation was terrible at the time, it taught me a valuable lesson: as long as I am determined, I can accomplish anything.

In summary, by the end of this farce, I was broke and owed $750,000. My creditors included friends, family, some complete strangers, and some dangerous individuals I should never have borrowed money from. I owed money to about 15 people.

Every morning when I woke up, I was bombarded with calls and texts, and the only thing that kept me going was that little bit of hope that this transaction could close at any moment. It was completely wishful thinking.

I had to borrow more money to pay rent and buy food because I couldn't go home and worry my parents. I had to find every possible way to hang on. I felt no pride in this, but for a while, I was almost out of money for groceries, and I was so tired of borrowing that I even started stealing things to fill my stomach.

The worst part was that my health completely deteriorated. The stress took a huge toll on my body. Every day I woke up to threats, and I had to constantly worry and hustle over this transaction. I developed a severe skin condition, with my face peeling and severely discolored. At my worst, I was even embarrassed to go outside. Everything in my life fell apart, and I hit rock bottom. However, despite it all seeming hopeless at the time, deep down, I still held onto the fantasy that I could somehow escape this predicament and rise back to the top.

Comeback

There is a limit to the pressure a person can bear, and at some point in December 2022, I finally decided I could take no more. I still held onto a glimmer of hope that Jimmy would somehow resolve this, but I could no longer endure this terrible situation and couldn't just sit idly by waiting any longer; I decided to take control of the situation myself.

I hadn't traded cryptocurrencies for a while and didn't want to trade, partly because I had no funds and partly because I was tired of taking on that kind of risk. I had been taking risks with Jimmy for too long, and I felt I needed to start doing some business to slowly build capital in a more stable way.

At that time, I saw many discussions on Twitter about acquiring micro SaaS companies at very low prices and then flipping them for several times the price a few months later. Micro SaaS refers to small software-as-a-service businesses targeting specific niche markets. This intrigued me because I felt it was an exponentially growing skill (essentially a smaller-scale private equity). I also knew that from my early online business experiences, I had some marketing skills, so I could leverage that. However, there were two major problems. One was that I had no understanding of programming; the other was that I had no money to buy software.

Fortunately, a stranger I had borrowed money from (let's call him R) ran a development company. Surprisingly, even though I owed him nearly $100,000, our relationship had become very close throughout this process. R and I had been talking on the phone and texting, and he understood my situation and how I had been deceived. Somehow, he understood from the beginning that I was sincere, and despite the large sum I owed him, he continued to trust me. I shared the SaaS idea with him, and he offered to cover the development costs if I could raise money to buy a micro SaaS, splitting the profits 50/50.

The first thing I did was search online for SaaS that could be purchased, and I stumbled upon a dog boarding management software that had been consistently profitable at $300 a month for the past two years. I felt that the software having paying users for such a long time indicated that it met market demand to some extent. I believed their revenue was low simply because the founder hadn't put enough effort into sales/marketing. I reached out to the founder via Twitter DMs and confirmed this.

The next day, my brother suddenly called me, saying he could no longer lend me money. He explained that a friend he had borrowed money from had made a big deal out of it, and he urgently needed to pay that person back. He had only $25,000 left, of which $5,000 was needed for personal expenses. Of the remaining $20,000, he wanted to take out $10,000 to try the transaction again. He felt that it would take too long to pay everyone back with the small private software. He pleaded with me to use the remaining $10,000 to try cryptocurrency trading again. I refused because I was already tired of taking on that risk. I felt frustrated and lost. The comeback plan had fallen through, and I didn't know what to do next.

Reviving in Cryptocurrency

Every day, my brother kept pestering me to use his remaining $10,000 to try cryptocurrency trading again. Somehow, he always had more confidence in my trading abilities than I did. However, I kept refusing until the day of the Blur airdrop. On February 14, 2023, with the Blur airdrop approaching, I was closely monitoring it because I had traded a lot on Opensea from late 2021 to 2022, hoping this airdrop would help cover my daily expenses.

During that period from 2021 to 2022, I had done exceptionally well by trading based on airdrop patterns. At that time, there weren't as many airdrop tokens as there are now, so they generally followed the same pattern. There would be a sharp drop at the token launch, and once a certain percentage of the claim rate was reached, it would rebound. I would closely monitor Dune's dashboards and charts, buying when all indicators aligned. This strategy was quite effective.

Unfortunately, at that moment, my brother said his $10,000 principal was almost gone. Our situation worsened, and his pleas echoed in my ears, so I ultimately agreed to trade the Blur token with his $10,000.

I funded my MetaMask wallet with $10,000 worth of ETH and then monitored all the necessary data when BLUR launched. I hadn't touched any cryptocurrency for several months since getting caught up in that transaction, but for some reason, I felt inexplicably confident.

I remembered how long it had been since I clicked that swap button on Uniswap, and the adrenaline rushed to my head. Although I was reluctant to admit it, I deeply missed that thrill.

The plan went very smoothly; a few hours after buying, my $10,000 turned into $14,000. I was ecstatic; this was the first time I had made money since mid-2023. At that moment, I realized my brother was right. I had to go all in again and trade to turn our fortunes around. This was the only way out.

The crypto landscape was very different from when I was actively trading. NFTs had been my main source of income, but now they were almost extinct. There was a bit of a meme coin bull market, but I had never traded perpetual contracts on CEX and didn't want to get liquidated due to painful lessons learned, losing the remaining $14,000.

This left me with no choice but to trade on-chain. The on-chain space was filled with deployers withdrawing liquidity pools, jared fromsubway.eth (the notorious ETH MEV sniper), and all sorts of random memes and narratives.

I knew from my NFT days that the biggest advantage in the crypto space was having a network, so I decided to avoid some on-chain killers and work with them to capture the market. Twitter was the best way to find connections; I had a pretty decent Twitter account and had some connections in the crypto Twitter space, but because my account was tied to so much money, I always felt it was inappropriate to tweet or interact with others. So I decided to create an anonymous account—this was one of the smartest decisions I have made to date.

At first, my tweets went largely unnoticed, but as I began to interact with others and post insights about tokens, things started to improve. The first "viral" tweet I posted received 2,400 views, which was quite a significant number in the small circle of on-chain trading. From then on, many people reached out to me via DMs to discuss mechanisms/data, greatly expanding my network. Some of them invited me to join group chats, where I would meet new groups, posting trading information I gained from these groups on Twitter, which in turn led to meeting new people, creating a cycle. This formed a virtuous cycle where information flowed continuously, which is crucial for cryptocurrency trading.

Eventually, I met some of the most legendary traders on CT. I began learning about perpetual contracts and gained valuable knowledge about how top industry experts assess and execute trades. During that time, I absorbed a wealth of knowledge that shaped the thought framework I still use today. I was incredibly lucky and grateful to have the opportunity to interact with these excellent traders during my early learning phase.

During that time, I slowly accumulated capital, but I was constrained everywhere. After all, trading was the only source of income for my brother and me, and every time I made money, I had to slowly pay off debts and cover various expenses. The top priority was to repay those impatient creditors who threatened me daily, so I had to set aside a significant portion of the money for that. In addition, every month I had to withdraw some funds to pay for rent and food, as well as cover my brother's living expenses.

Fortunately, my trading skills were quite good, and I didn't incur many losses, so the impact of insufficient compounding wasn't significant for me, but it did seriously hinder the growth of my portfolio. Nevertheless, by the end of summer, I successfully turned the initial $14,000 into about $50,000 to $60,000. I began to truly believe that I had a talent for cryptocurrency trading.

Sources of Funds

I met a good friend through NFTs in 2022, let's call him V. He knew my anonymous Leo account and had been closely following me for the past year. Not long ago, I had borrowed money from him to participate in Jimmy's transaction, but fortunately, he refused.

We often messaged each other, and I would share the excess profits I gained in group chats with him, allowing him to make some money from time to time.

After helping him make money several times in a row, he offered to let me trade with some of his money. The amount wasn't large ($10,000), so he generously proposed a 50/50 profit split, with him taking all the losses. For me, this was like a windfall from the sky, as I desperately needed funds, and it was a completely zero-risk trading method for me.

I made a few lucky trades with the $10,000 he gave me, and within a few weeks, the money doubled. I returned the money to him, feeling fantastic; after disappointing so many people over the past year, I could finally help someone make money. He reinvested all the profits back into my account, allowing me to continue trading with his money.

Meanwhile, I had also become very good friends with R (the person I had previously contacted about the software). When he gave me money, we had never met, and he lived on the other side of the planet. Now, we had met several times and chatted almost every day. He wasn't trading much at the time but was eager to learn, so I often shared various interesting things I encountered with him and explained how to assess whether they were worth trading.

V had also done some trading with R. V was more experienced than both of us because he was running a very profitable company at the time, dealing with many high-net-worth individuals. One evening, while we were having dinner together, V proposed that we start a small fund together.

I would be responsible for all the trading, while R and V would handle operations/accounting and fundraising. At first, I hesitated a bit because I didn't have complete confidence in my ability to manage a large amount of money for others. So far, most of my trading strategies had been conducted on-chain, where liquidity was insufficient, making buying and selling operations difficult. This model was hard to scale. However, after enduring various hardships over the past year, I knew deep down that as long as I was determined, there was nothing I couldn't accomplish.

We all agreed and decided to take an unconventional route, paying out profits monthly. At the end of each month, I would strive to pay out all cash and distribute profits. If I needed to continue holding a position at that time, I could extend the payment date. This "fund" structure was quite temporary, but after all, it was still in the early stages.

The first cycle began on October 22, 2023, with initial capital of $177,000. Of that, 40% was my personal funds (I invested 100% of my portfolio), and the remaining funds were raised by R and V (including their own money).

By November 5, the fund's assets under management had grown to about $400,000. Of course, before starting the next cycle, I still had some debts to repay, and R and V also wanted to take profits.

Last year at this time was the most financially difficult period of my life, while this year was completely the opposite. The snowball kept rolling bigger and bigger, and it couldn't be stopped.

On December 30, 2023, I paid off my last debt. R refused to charge me interest, so I decided to buy him a rose gold Daydate watch in the future as a memento of what we had gone through together. I gave some money to my brother, telling him I would trade with it to pay off debts.

After carrying a huge debt for over a year, it was truly a beautiful day. There is nothing in this world that brings more joy than being free from debt.

Follow-Up

Since I started trading without debt, the momentum has been unstoppable. By the end of the year, even after cashing out most of the profits each quarter (the payment model changed from monthly to quarterly), the assets under management had nearly reached 20 times the initial capital. Of course, the process wasn't smooth sailing—I also experienced some significant losses—but fortunately, I ended up making a profit every quarter.

Jimmy owes me (and still owes me) nearly $1.5 million, but I have completely lost faith in him. We occasionally keep in touch, but every time I talk to him, he finds new excuses. Later, I discovered that he had colluded with others to carry out this scam. I realized that when the trading was going smoothly at the beginning, he was borrowing money from others. It was a tactic to lure me in and gain my trust. He later confessed to me that he owed tens of millions of pounds in debt.

The complex arbitrage gambling "business" he had pitched to me was actually just him recklessly betting on sports betting sites. He was just a gambler trying to escape his predicament through gambling. Maybe one day, he would suddenly strike it rich and pay off his debts. I could have used other methods to get my money back—some of which might not be entirely legitimate—but I realized that I preferred to focus my energy on the market. One day, he would get the punishment he deserved.

By the end of 2024, when the fund's assets under management reached an all-time high, I decided to gradually close it down. My portfolio had developed to a critical point where the pressure of managing other people's money was not proportional to the returns. Moreover, I wanted to play golf properly and take the sport seriously for at least a while. Managing millions of dollars while spending eight hours a day playing golf felt incredibly surreal. Fortunately, everyone was satisfied with the profits we had generated for them and understood the situation.

The best trade of the fund was $PEPE. Coincidentally, this was also the last trade I made with the fund. I made so much in less than 24 hours; it felt unreal (unfortunately, the screenshot was taken close to the peak, and the final exit price was slightly lower).

On the day I closed the fund at the end of 2024, my feelings were very mixed. Looking back at everything that had happened over the past two and a half years, you really discover who you can truly trust during the low points of life. This arduous experience made me deeply appreciate the importance of building good relationships. I might lose everything again (hopefully not), but because I have these people in my life, I can still bounce back quickly. Relationships are truly crucial.

If you've read this far, I hope you understand one theme I want to emphasize: never lose hope. No matter how dire your situation may seem, there is always a way out. The road ahead may seem incredibly difficult at this moment, and it very well may be, but when you finally overcome all the challenges, the joy and satisfaction you feel will be one of the most precious feelings in the world. If you feel like the world is collapsing around you, never lose hope. It is in such moments that you can truly understand yourself. As long as you persevere, one day you will look back with satisfaction. Without the lows, the highs wouldn't shine so brightly.

Related: Six AI "Traders" Ten-Day Showdown: A Public Lesson on Trends, Discipline, and Greed

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