About the randomness of investing in 100x coins

In yesterday's article introducing Degen, I quoted a piece of data on the price trend of this token. According to the data on https://www.coingecko.com/, the price of this token has risen more than 1,000 times from January 15 this year to yesterday, which is a 1,000-fold coin.

This reminds me of the topic of "100-fold coins" that we often talked about in the past.

I remember that in an article about the year before last or last year, I shared some judgments on "100-fold coins". One of them is: if you refer to the cases of the last round of bull market (such as YFI, etc.), it is very likely that the future 100-fold coins (at that time) have not appeared at all.

Now the example of Degen has really proved this point.

If we take a closer look at its background and examine its price trend, we will find some very interesting phenomena.

It was launched on January 15 this year. Its idea came from a channel called Degen in a decentralized social application (farcaster.xyz) that seems to be popular now. The token was issued on the second-layer extension Base chain of Ethereum.

So if we are lucky, it would be the best to catch it at the beginning.

Then let's go back in time and see what we who have experienced that period were thinking and paying attention to at that time. Can we pay attention to it at that time?

Coincidentally, we had a Twitter exchange a few days before Degen went online (that is, January 6). I summarized the questions that readers paid more attention to in that exchange, which are basically the following categories:

The development of BTC Layer 2 and subsequent prospects

Bitcoin NFT ecology and potential projects

The current situation and follow-up of the Bitcoin asset ecology (including ARC, Rune, BRC420, etc.)?

Do the golden shovels in the Bitcoin ecology (such as Bounce, Turt, etc.) have potential in the future?

Will the Inscription Token fall again to encourage investors who haven’t gotten on board to get on board?

Will the bull market start in the first half of the year?

Opportunities for Ethereum’s second-layer expansion (such as Starknet)

What is the current status of the Ethereum game ecosystem (such as Magic and Bigtime)?

Did you see that? None of these questions are about decentralized social networking, and none of them mention farcaster.xyz, Degen channels, and Base.

I knew about farcaster.xyz at the time, but I haven’t used it until now.

Why?

Because it’s not easy for me to use. It only has a mobile version, not a desktop or browser version, and I don’t like to perform various operations on my phone. In addition, you have to pay a fee to register an account, and the key is that you can only pay by traditional payment methods.

These two points give me a headache. Especially the payment method, which doesn’t look like a Web 3 application at all.

So it is hard for me to imagine that I would use this application at that time.

I also knew Base at that time, but in my opinion, Base at that time did not have any outstanding features compared with other second-layer extensions. As for its ecosystem, I only knew a relatively famous DEX, so I could not pay attention to this token.

I guess many readers will have similar situations as me.

Let's take a look at its price trend:

Based on the data on Coingecko, I divide it into four stages.

Phase 1: From January 15 to January 29, its price rose from 0.000023 US dollars to 0.0003 US dollars, an increase of more than 9 times.

Phase 2: From January 29 to February 24, its price rose from $0.0003 to $0.005, and then returned to $0.0008. That is to say, it rose more than 10 times, but then there was a correction of more than 80%.

Phase 3: From February 24 to March 14, it rose from $0.0008 to $0.003, but then fell back to $0.0017. That is to say, it rose nearly 3 times again, but still did not allow users who bought at $0.005 to get their money back, and then there was another nearly 50% drop.

Phase 4: From March 14 to April 1, it began a wave of momentum, rising from $0.0017 to $0.06, an increase of more than 34 times.

In the first stage, I estimate that even if many investors were lucky enough to buy it, they would not be able to resist the temptation of 9 times the return and would leave the market with a profit.

In the second stage, I estimate that many investors may not be able to tolerate the large retracement and will sell their stocks at a loss.

In the third stage, I estimate that investors who did not leave the market in the second stage will reluctantly sell their stocks at a loss after seeing another big drop without even getting their money back. Even if many investors who were lucky enough to buy it at this stage would not be able to withstand the 50% correction and sell their stocks at a loss.

It is only in the fourth stage that it has the largest increase, the strongest influence on the expansion of the circle, and it is probably the stage where most investors enter the market.

We might as well ask ourselves, even if we are lucky enough to buy it in any of the above stages, can we endure the multiple plunges and temptations in this process and keep holding it in our hands until the final harvest?

So far, Degen has risen more than 1,000 times. If we analyze its growth process now to decide whether to buy it or not, then it is meaningless. What is more valuable is what experience and lessons we can learn from it.

From Degen's thousand-fold history, we can see that to find a 100-fold coin and get a "100-fold" return from it, we can try the following two points:

First: Pay attention to new projects.

Second: When we make up our minds to invest in a project and hope to gain high returns, before it reaches our expectations, we must be able to withstand the blow of the plunge, withstand the risk of zeroing, and reject the small temptations in the process all the way, and finally we may reap big fruits.

The first of these two points has a high luck component, and it depends on personal understanding, not everyone can do it; but the second point is something everyone can do as long as we control the risk and try with a small amount of money that can afford to lose, and endure the torment of human nature in the process.

This is why I have frequently expressed this view in several past exchanges and articles:

In a bear market, when we have used some small positions that can be completely sacrificed to bet on some projects that may generate high returns, as long as there is no problem with the project team, we might as well hold it and completely ignore the plunge and small rise in the process. Unless its increase has reached our expectations, we will not consider cashing out until the middle and late stages of the bull market.

This is something that we do not need luck and everyone can do.