FMG Founder: Ten Insights on Encryption in the Secondary Market for 10 years

Written by EO Hao, Founder of FMG

Hello everyone, I am the founder of FMG. Today, Bitcoin has broken through the $100,000 mark, and I want to share the core principles of the Bull Market that I have experienced after several cycles.

First, emotional value

In the market, the most important asset is the emotional value you give to yourself. Keep yourself energetic and focused, sleep well, exercise well, feel good, only compare with yourself, and ride on the back of the bull.

2. Recognize right from wrong

The market has already risen 6 times from the bottom since 2023. If you are still entangled in the fundamentals, unlock volume, FDV data, instead of getting involved and embracing the risk, you will completely miss this opportunity wave.

Three, Sad Fact: Volatility drop

Due to the crowding of the get on board and gamma scalping strategies of the robot trading, the wave amplitude of BTC in this round has been greatly reduced. Everyone knows how to grab and how to short. Profit protection should be withdrawn and wait for opportunities. In such a game, it is indeed not as profitable as before.

This is also why MEME has risen, the market needs more volatility. We also believe that the moment of reversal of odds will come, and all kinds of zones will erupt. Then the cycle will end, and also rest.

4. The Use of Leverage

The time for leverage (contract, margin) is short, and off-exchange leverage can be used for a long time, just like MSTR traders.

Five, using a combination of big dump and big pump in the Bull Market

We need a combination of strategy and risk control discipline to complete. We build a portfolio like this: core assets + growth assets + cash position + speculative assets.

Hold on to the first two, don't move. If you can't resist, adjust the last small Position, speculative asset.

6. Recognize the risk-return ratio and reduce anxiety

Core assets are stable returns, growth assets are medium to high risk returns, speculative assets are very high risk returns.

If your fren says, "I bought a project that rose 5 times", don't worry, he just bought a low-quality speculative asset. Let me explain why.

7. Core assets: limited downside, about 2 times upside

Core assets, are assets recognized by the finance departments of some countries, listed companies, and Financial Institutions. Even a non-expert newbie knows that this thing is good, and it can be judged just by trying. It's the only one name. Your goal is to hoard more and more core assets in the market.

Do not have high expectations for core assets, do not be obsessed with whether it is 200,000 or 500,000, hold on until the market sentiment goes crazy and sell. Just accept the price at that moment.

8. Growth assets: 4-6 times, Yao Ming in the crowd

Growth assets, not recognized by the state, but some Hedging funds, CEX, and Defi supported and recognized, they have relatively high Liquidity.

Yongping Duan once mentioned a game: how to find Yao Ming in a crowd? Most people would think that a 1.9-meter-tall ordinary person is Yao Ming, but it's actually very simple. When Yao Ming enters the venue, the restaurant is definitely buzzing.

Growth assets often fall within the cognitive range of the general public and do not require technical expertise. They are the most recognizable assets to people outside the circle, apart from BTC. Ethereum, Solana, DOGE, BNB, are all like Yao Ming in the crowd. If there is something very novel, with potential gains not as good as theirs, or just slightly higher, but with far less Liquidity than theirs, it is better to hold onto growth assets and consider skipping it.

In a frenzied market, growth assets often bring returns of 4-6 times or even higher, and are relatively stable.

Nine, speculative assets: be sure to pursue 10 times or more.

Speculative assets are for professional players.

YC's startup bible says that you should provide a user experience that is 10 times better. Speculative assets should also generate a return of more than 10 times in order to justify the risk you take.

So when your fren brags about how many times he made, you should check if it's a shoddy speculation.

PNUT pump over 10 times in 30 days

10. What is successful speculation?

I describe the three characteristics of speculative assets, which can only be 10 or even 100 times with these.

The first type is the dark horse of the strong.

The top 50 in Market Cap have often experienced many cycles of hardships, and it's not easy to reach this Market Cap. A fast horse cannot achieve such a large increase in a short period of time, but if it can squeeze into the top 50, then hold on firmly. Network effect, the strong get stronger.

The second type is a new species.

New species are something we have never seen before. For example, in the previous cycle, AXS actually allowed Filipinos to make money by playing games? For example, this AI Meme, a conversational robot, can actually become a digital asset? We need funds like reconnaissance soldiers to layout and learn from them. Enter a position first and then learn.

The third category, niche and undervalued.

Because it's so niche and underrated, the squat is low, but the takeoff is high.

Therefore, obscure undervaluation is often as rare as pearls.

When everyone is busy speculating on hot topics, they forget about them. One piece of Favourable Information after another can drive the whole niche market, and small Market Cap can easily go To The Moon. For example, POL, CRV, HNT, etc.

Summary

Overall, speculative assets are difficult to deal with. We invest and hold them with profit protection funds, and leave the rest to fate and time. Those who focus on the absolute monthly returns every day will definitely not do well in this area.

I think the investors who can extract profits from the investment in BTC and growth assets, and persist in doing this, are responsible investors who have discipline and systematic pursuit of Alpha and manage money. FMG is such an investor.