I am Li Li, a blockchain investment analyst. I started learning Bitcoin knowledge in April 2016, and it will be more than 6 years by July 2022. I would like to review my journey of learning and investing in blockchain.
In April 2016, I was intensively preparing for the U.S. Chartered Financial Analyst Level 2 exam. I accidentally saw the introduction of Bitcoin in an investment research report from a securities firm. At that time, I really felt my eyes lit up and my blood boiled. , thinking this is a new investment opportunity with unlimited possibilities. In order to learn about Bitcoin, I have no intention of reviewing the Level 2 CFA exam, leaving my CFA exam score at Level 1.
In June 2016, Li Li participated in the "Blockchain Technology Training" organized by the Shenzhen Finance Association and further learned about Bitcoin and Ethereum technologies. Joined the "Ethereum Enthusiasts" community to popularize Ethereum knowledge and usage skills to newcomers. Start investing in Bitcoin and Ethereum since then. At that time, the price of Bitcoin was only about 5,000 yuan (about $800), and the price of Ethereum was only about 90 yuan (about 14 USD).
In July 2016, Li Li participated in the Blockchain Summit in Beijing, where he had close contact with industry figures such as Bitmain CEO Jihan Wu and AntChain CEO Da Hongfei. He opened up his mind by listening to speeches. vision. At that time, Ethereum encountered a hacker attack crisis from the DAO (Decentralized Autonomous Organization), and the price of Ethereum fell to RMB 60 (approximately $10).
When the speakers in the Ethereum community talked about "code is law" on the stage, they also expressed uncomfortably that the current technology is still far from "code is law". But I'm not afraid. I am confident that Ethereum technicians and the community will successfully hard fork based on common sense in social operations and will not recognize the value of hackers stealing coins. Therefore, we continued to hold positions, and eventually the entire Ethereum community survived the crisis.
But Li Li believed that the Ethereum software was still very immature, and Li Li should not be a venture investor, so he sold all Ethereum at 120 yuan (about 19 US dollars) , concentrate on studying Bitcoin. Although it missed the very large gains later, it also avoided the risks of many small currencies.
The story from June 2016 to March 2018, Li Li wrote in "This man invested in Bitcoin and made 12 times his profit in one and a half years. What did he do right?" 》The article disclosed in detail the mental journey at that time.
In May 2017, Li Li used the knowledge he learned as a Chartered Financial Analyst Level 1 to pass the Futures Practitioner Qualification Certificate.
Because the experience of escaping from the top in March 2018 was so unforgettable, after taking a short position, Li Li determined to predict the top of the bull market. So I started to learn R language and Python, studied a lot of technology and investment books, practiced the examples and assignments in the books, and tried to analyze the Bitcoin on-chain data using various methods I learned.
In May 2019, Li Li participated in the Python and financial engineering workshop of Ken Gleason, Vice President of Goldman Sachs Risk Management Department, and learned to use machine learning algorithms for data analysis and modeling, and learned to use VWAP (Vote Transaction) Volume weighted average price) trading algorithm to reduce the impact of transactions.
In June 2020, Li Li developed a model for predicting the logarithm of Bitcoin's market value, with a preparation rate as high as 90%. He designed early warning indicators and established a long-term Bitcoin investment strategy based on the historical data of early warning indicators. , using historical data from January 2012 to June 2020 for backtesting, the cumulative return rate is 2077 times, and the maximum drawdown ratio is 25%. At the beginning, Li Li didn't have much confidence in this strategy because the number of transactions was too small. Would there be insufficient samples?
When Li Li saw the early warning indicator prompting him to buy in May 2020, Li Li gained confidence because the price bottom this time was prompted by the early warning indicator.
In July 2020, Li Li once again made a firm offer to invest in Bitcoin spot according to the buying instructions of the early warning indicators.
In May 2021, Li Li sold all Bitcoin spot according to the selling instructions of the early warning indicators.
In December 2021, the warning indicator was close to the sell warning value again. Li Li used Bitcoin put options to short Bitcoin for the first time.
From July 2020 to June 2022, Li Li’s real cumulative return on Bitcoin investment was 450%. The real market has verified the effectiveness of this long-term Bitcoin investment strategy.