Source: BlockBeats
Original Title: How I Built 8-Figure Wealth in Crypto (And Aiming for 9)
Original Author: @WarrenNakamotoX, Crypto Investor
Editor's Note: This article shares the author's experience of achieving eight-figure wealth through cryptocurrency and aiming for a nine-figure target. The core is designing a long-term compounding investment portfolio, emphasizing discipline, patience, and realistic expectations. The author continuously outperformed BTC's performance by holding BTC, lending funds for short-term trading, cycle top investments, and angel investments, while protecting downside risks. The key to success is focusing on the circle of competence, avoiding chasing short-term windfalls, and enjoying the investment process, ultimately achieving steady wealth growth.
Following is the original content (slightly edited for readability):
What is the most beautiful thing cryptocurrency can give you?
= Life-changing returns
What is the ugliest thing cryptocurrency can take away?
= All the gains you once had
I know why you're here, for the same reason as me:
= Making money. Life-changing money.
We know this is possible because we've all heard those success stories. But honestly, 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 even reach $100 trillion one day.
· Global stock market is currently $126 trillion,
· Global bond market is $140 trillion,
· Real estate market is approximately $400 trillion,
· While cryptocurrency is only $3.5 trillion.
BTC is already among the top five global assets by market cap, and I'm not surprised it might become the number one asset in the future. In the next 24 months, I believe BTC will surpass Microsoft, NVIDIA, and Apple to become the second-largest global asset.
But unfortunately: if the market continues to grow while you're still losing money, something is definitely wrong. It could be your approach, or your strategy or skills need improvement.
In any case, something needs to change.
The most important change, which most people get wrong, is expectations. They see someone achieving 50x or 100x returns and jump in to chase the same gains.
I've seen too many such people. Some even made big money at one point, felt invincible, and then quickly lost everything. Why? Because they never established 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 been grinding in the stock market for over a decade. My goal was simple: achieve a 40% compound annual growth rate (CAGR). After seven years of compounding, my funds multiplied 10 times. I did it and was incredibly proud.
I know for most crypto traders, hearing a 40% annual return sounds like a failure, but at the time, this was top-tier. Warren Buffett, the greatest investor in history, has only achieved a 19.8% average compound annual growth rate since taking over Berkshire Hathaway in 1965.
19.8% made him a legend. Sounds low, right?
But can you maintain a 19.8% return every year for 60 consecutive years? Through wars, market crashes, economic recessions, and chaos?
That's true skill! Not those fleeting massive returns, but quiet, boring, consistently outperforming the market returns.
In the stock market, how do you judge if your returns are good?
= Consistently outperforming the market.
In cryptocurrency?
= Consistently outperforming BTC's performance.
You might ask, why outperform BTC? Because if you can't do that, what's the point of investing in other coins? You might as well just buy BTC and sit back.
Reminder: BTC has grown over 10 times in the past five years. Do you know how many people lost money during this period? Many. If they had simply bought and held BTC, their returns would have been 1000%.
About outperforming BTC, for example:
· If BTC performs +30% this year and you earn +40%, you're excellent.
· If BTC drops -25% this year and you only lose -15%, you're still excellent.
To measure this, you need at least 5-10 years of performance to judge if you're 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 the question "How to quickly 100x". The real question is: How to consistently outperform BTC's performance and never go to zero?
The answer is portfolio design.
· Design must be sustainable;
· Design must compound;
· Design must protect downside risks while capturing upside opportunities.
Even if you lose, you still have a great chance of winning in the long term. This is the philosophy behind how I build and design my portfolio.
Okay, now let's talk about how to actually outperform BTC.
First, ensure your portfolio is 100% BTC. This way, you're already matching BTC's long-term performance by default.
Then, I will lend, with lending amounts never exceeding 50% of my BTC position. Lending annual interest rates are usually around 5%. I will use these funds to do a few things:
Short-term Trading, Maximum 3 Months
I only touch projects with strong fundamentals, easy to achieve 2-3x returns, usually projects that dropped in bear market but still have solid products. I typically exit at 50%-100% profits.
For example, if you've followed me: $ETH, $PENGU, $ANIME, $COOKIE, $KAITO, and some I haven't publicly shared: $HYPE, $RAY, $JUP, $SUI.
I actively accumulate during bear markets, selling after 50%-100% profits. When the bull market arrives and all coins hit all-time highs, I usually stop trading.
$KAITO and $HYPE are my key projects this cycle. But when they drop, I sometimes add more positions for short-term operations.
Cycle Top, Single Cycle High-Conviction Investment, Maximum 12 Months
This really makes me happy. Currently, I allocate a maximum of 10% of funds, but before reaching eight figures, I allocated nearly 20%. Early successful cases were $UNI and $CAKE, before I named this strategy "Cycle Top". Last year, I participated in $HYPE's TGE (Token Generation Event), achieving 10x returns in a month. Now I'm holding $KAITO, which has already doubled and remains strong.
Cycle Top has two conditions: "Screening" and "Timing".
Screening criteria are fast-developing quality founders, strong community, products actually being used, capturing attention while still early stage.
For timing, I only start looking in the first year after BTC halving, exiting within two years at most. This rule remains unchanged, but may be adjusted in the future.
Angel Investment, Maximum 24 Months
The only reason I created this X account was to get better angel investment opportunities. So far, it's been effective, and through friends' introductions, I've accessed excellent project teams.
I now support more than 15 projects. I know this is high-risk and high-reward, but these funds come from lending income, so there's no loss for me. I have indeed invested in a few bad projects, but the overall return is still good.
Through these three strategies, if I make money, I will use the earnings to repay the loan and unlock my BTC. This way, I'm only playing with profits. If the profit is large enough, I will buy more when BTC drops, and then repeat this cycle.
What if my trading and cycle performance is very poor? First, your portfolio isn't dead, BTC is still supporting you. If BTC continues to grow, you can borrow more funds to continue playing.
Your portfolio will only be ruined if: you borrowed 50% of BTC, all your operations are zeroed, and BTC drops by 50%. You would have to be extremely unlucky, making every step wrong, to encounter such a combination.
This is my entire operation. I don't play with low-cap meme coins, don't trade Non-Fungible Tokens, and don't engage in perpetual contracts because I'm not good at them. I tried to learn, but found it's not my domain. If you're skilled, you can use BTC funds to do what you're good at. Focus on your own circle of competence, as everyone has different skills.
The most important thing for me is: I love my life. I design my investment portfolio to ensure I can sleep soundly, enjoy every day, do what I like, and never feel stressed about investing.
Even when I started my Web3 journey in 2017, my goal was never to get rich quickly, but to accumulate wealth slowly but steadily, while enjoying the process.
In 2017, I decided to achieve $100 million in wealth by 2030. Not through luck, not through gambling, but by building a bulletproof system that compounds over time. I feel I'm on the right track, which is why I'm sharing everything here. You don't need to copy 100%, just choose the parts that suit your risk, life, and goals.
I share these not because I think I'm amazing. I'm still in the learning stage, 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.
