The year 2021 was a golden chapter in my crypto journey. The bull market roared, and every investment seemed to multiply overnight. I began to believe I had a Midas touch—buying low and selling high with uncanny precision. The euphoria peaked when Facebook rebranded to Meta, signaling a bold leap into the metaverse. Suddenly, metaverse-related cryptocurrencies surged, doubling and even tripling in value within weeks. Like many others, I couldn’t help but wonder: What if I had gone all in?
But as every seasoned investor knows, "The party always ends—what matters is knowing when to leave."
The Peak and the Fall: Recognizing Warning Signs
By November 2021, Bitcoin and the broader crypto market reached their all-time highs. What followed was a steep decline that marked the beginning of a brutal bear market. In 2022, global turmoil intensified with the outbreak of the Russia-Ukraine war, triggering widespread inflation and prompting the Federal Reserve to begin aggressive interest rate hikes. Economic uncertainty rippled across markets, and crypto was no exception.
Sensing danger, I decided to shift part of my portfolio into what I believed was a safer, yield-generating option: UST, the algorithmic stablecoin backed by Terra (LUNA). Promising an unsustainable 20% annual yield, UST was heavily promoted across social media and YouTube channels as a “low-risk” way to earn passive income.
👉 Discover how to evaluate high-yield crypto opportunities safely and avoid common traps.
In late April, after receiving my annual performance bonus, I converted the entire amount into UST, eager to capitalize on those returns. Just weeks later, in early May, Terra collapsed. The so-called “stable” coin broke its 1:1 peg to the US dollar and plummeted to zero in less than 72 hours. My principal vanished overnight. That 20% yield? Worthless air.
I lost a six-figure sum in Taiwanese dollars—a devastating blow that shook my confidence to its core.
Chasing Losses: The Dangerous Allure of Leverage
Heartbroken and不甘 (unwilling to accept defeat), I made another critical mistake: I turned to leveraged trading in an attempt to recover my losses quickly. I dove into perpetual futures contracts, chasing every signal from popular trading YouTubers and joining multiple Telegram and LINE groups promising guaranteed profits.
Spoiler alert: there are no guarantees in trading.
The more I traded, the deeper I fell. With each losing position, my emotional state deteriorated. Fear, greed, and desperation took over—classic signs of gambling behavior disguised as investing.
👉 Learn how disciplined risk management can protect your portfolio during volatile markets.
I now understand this truth all too well:
"When you’re trying to win back losses with leverage, your mindset is already broken—you’ve entered the gambling zone."
By June 2022, I hit rock bottom—emotionally and financially. Determined to rebuild, I made a life-changing decision: I switched jobs, secured a higher salary, and committed to a healthier financial strategy. No more reckless bets. No more emotional trades.
Instead, I adopted dollar-cost averaging (DCA)—regularly purchasing spot Bitcoin and Ethereum through a major centralized exchange. This approach helped me stay consistent without obsessing over price swings or margin calls. For months, I regained stability, focusing on work and long-term growth.
Then came the ultimate gut punch.
FTX Collapse: A Harsh Lesson in Self-Custody
In November 2022, FTX—the very exchange where I had been DCA’ing for four months—imploded within days. News of fraud, misused customer funds, and insolvency spread like wildfire. Billions in assets were frozen. My holdings? Trapped.
That’s when the old crypto adage hit me like a freight train:
"Not your keys, not your coins."
I had heard it countless times before—but only now did I truly understand its weight.
Immediately, I purchased a hardware wallet and transferred every remaining asset out of centralized exchanges into my own self-custody wallet. No more relying on third parties. No more blind trust.
From the peak of 2021 to the collapse of FTX in late 2022, my crypto net worth had shrunk by 85%. Pride turned to pain. Confidence crumbled into despair.
But from that wreckage emerged clarity.
I posted these words on my social media that day:
"I’m not OK, but will be OK. I still have my loved ones, meaningful work, and good health. Life is still good. Investment is a long journey. What doesn’t kill me makes me stronger."
That moment marked my transformation—from an overconfident speculator to a humble, resilient investor focused on sustainability over speed.
Lessons Learned: Building a Smarter Crypto Strategy
Today, my approach is guided by three core principles:
- Prioritize Security: Always use self-custody wallets for long-term holdings.
- Avoid Yield Chasing: High returns often come with hidden risks—especially in DeFi.
- Invest for the Long Term: Focus on quality assets like Bitcoin and Ethereum with proven track records.
Frequently Asked Questions
Q: How can I avoid falling for "too good to be true" yields like UST?
A: If a yield seems abnormally high—especially above 10%—ask how it’s generated. Sustainable yields rarely come from algorithmic mechanisms without collateral backing.
Q: Should I ever use leverage after a big loss?
A: Absolutely not. Emotional trading after losses leads to poor decisions. Take time to reset mentally before making any moves.
Q: Is dollar-cost averaging still effective after exchange collapses like FTX?
A: Yes—but only if you withdraw assets to your own wallet regularly. DCA into self-custody, not exchange-based accounts.
Q: What’s the best way to store crypto safely?
A: Use reputable hardware wallets (like Ledger or Trezor) and enable multi-signature setups for large holdings.
Q: Can I recover from major crypto losses?
A: Yes—many have. The key is patience, education, and avoiding revenge trading.
Q: How do I know when to exit a project?
A: Watch for red flags: lack of transparency, anonymous teams, unrealistic promises, or sudden community panic.
Core Keywords:
- Crypto investment journey
- Terra Luna crash
- FTX bankruptcy
- Self-custody crypto
- Dollar-cost averaging crypto
- Avoiding high-yield traps
- Leveraged trading risks
- Long-term crypto strategy
My journey through the 2022 crypto crashes was painful—but necessary. It stripped away illusions and rebuilt my foundation on discipline, caution, and resilience. The market doesn’t care about your feelings. But with the right mindset and tools, you can survive—and thrive—no matter what comes next.