How to Find Your Edge in Cryptocurrency?

Compiled by: Plain Language Blockchain

If you want to profit in cryptocurrencies, you need to have an edge. This can take many forms, but you must have one. Otherwise, you’re at the mercy of the market.

An edge is a strategy, skill, or knowledge that gives you a higher probability of profit over the long term.

Think of it as an advantage (such as insider information that only a few can access) that enables you to profit. The key is that you need to be able to repeatedly reproduce this advantage until it disappears. Then, you must change your strategy or learn new skills.

In the following content, I will share real examples to help you define your own advantage. Let’s get started!

A consistently profitable trader will tell you that an edge is a clear market advantage that can be exploited during certain periods. Arbitrage is one example.

For instance, if Ethereum is trading at $3,200 on Binance (BN) and $3,150 on Hyperliquid, a bot can buy on Hyperliquid and sell on Binance for a net profit of $50 (minus any fees), until prices converge and the arbitrage opportunity disappears. When market volatility is similar, this is a very robust and profitable trade.

Similar strategies are also evaluated in DeFi and across different blockchain networks, where assets like Ethereum sometimes plunge enough to make such arbitrage profitable.

However, arbitrage is a crowded trade, and most of it is automated. For ordinary users, this advantage has already disappeared because market makers will “harvest” it at the first opportunity, and they almost never pay fees on these platforms (which is another clear advantage for them!).

How to cultivate an edge?

Buy-and-hold itself is not an advantage. Especially if you buy and hold the wrong assets. But if you combine buy-and-hold with the following points, you will gain an advantage over time:

• Understanding what honest money is and why it matters.
• Planning to accumulate hard assets, preferably highly liquid assets.
• Not minding waiting years or stacking for years to enhance compound effects.
• Having stable sustainability, allowing you to adjust over time to grow your portfolio.

By correctly assessing assets like Bitcoin, gold, index ETFs, or real estate, you are very likely to become quite wealthy after ten or twenty years. This is a buffer method of gradually developing an advantage by continuously investing in assets. That’s your strategy!

Applying the same approach to altcoins (shitcoins) during the same period is likely to lead to losses.

This method is the way to achieve successful communication. However, if you want to actively cultivate an edge, consider the following example.

Have a strategy or create one

Here are clear examples to help you understand what I mean by strategy:

1. Every day, 30 minutes after the New York Stock Exchange opens, only trade one asset. If during this 30-minute window, the price is at a higher high, go long. If at a lower low, go short. Hold the position until lunchtime at most. Repeat this daily.
2. Participate in public or leaked token sales, following strict screening criteria (no lock-up or long-term vesting after the token generation event). Sell these tokens within a week of their listing on trading platforms. Repeat several times a year.
3. Lock your USD liquidity into five “buckets”. Invest each portion (20% in Sichuan) into a yield-bearing DeFi protocol. Your goal is to make your portfolio average 10% to 15% annual return. This is four times higher than traditional finance (TradFi) interest rates. Review your portfolio and positions daily and maintain your advantage accordingly.

If by the end of a week, month, or year, you are profitable or in profit, then you have an edge. Note the net key for any strategy: it can be repeatedly repeated. This edge fails when you are no longer profitable or underperforming relative to benchmarks (like Bitcoin or a 5% annual AAVE yield).

Assess your skills and double down

Whatever strategy you choose, you must evaluate the skills required and improve them. As long as you do this, you can turn a modest profit strategy into one that grants you substantial advantages. By the way, I mean:

• Learn price action and technical analysis. Spend time studying charts; prices will “speak” to you. Refine your strategy so you precisely know what to do at each moment. Repetition of your strategy should become a spontaneous and predictable action, regardless of how the market moves, until you know exactly when to buy, sell, stop-loss, and take profits. Until everything is clear.
• Build a network and “collection” on-chain over time. You should be able to easily participate in private or public sales before tokens launch. This is your advantage. For example, MegaETH sale had 50,000 interested participants, but only 5,000 succeeded. “Cultivate” such airdrops, sales, and buying more Bitcoin, then repeat.
• Become an advanced DeFi user. You can easily evaluate opportunities and risks of new protocols across various blockchain networks. You use optimized pathways and bridges to deploy cash. As long as yields are competitive, you “farm” and report any issues. This agility in rapid migration within DeFi is your advantage. You will leverage your liquidity outside of yield farming points and airdrops, further increasing your returns. Repeat again and again.

Discover and leverage any advantage

In most cases, cryptocurrencies are a zero-sum game. To profit, you must take from somewhere. That’s why many fail in this space. It’s a highly competitive industry.

To stand out, you need to take a different approach. For example, I started my X account out of curiosity and interest, publishing my analysis of various protocols and coins. It quickly gained followers.

Over time, having an audience can create a leveraged advantage, allowing you to get information before it becomes public by interacting with teams and protocols that are unaware of your insights. This is a clear advantage.

Others are good at reading the blockchain or can build bots to track or mirror whale actions in real-time. This provides them with very limited public interactions.

Having a clear advantage also means building something on-chain as a developer. You control your product and can leverage it to gain an edge.

Summary

If you don’t have a strategy or advantage in the crypto casino, don’t expect to become wealthy. At best, you might get lucky with a meme token, but you’ll quickly lose that profit chasing the next token.

Spend a week or a month to develop, refine, and perfect your strategy. First, identify your skills, which will give you a concrete advantage. Once your actions start generating profits, you’ll know you’re on the right track. If a previously profitable strategy stops working, look for a new advantage.

The market always favors those who are flexible enough to seize early opportunities. Your role is to appear early and maximize your advantage. When others follow the herd, it’s time for you to exit.

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