Frenzy, panic, and crash: volatility is an inevitable path to wealth.

Author: Raoul Pal

Compiled by: Deep Tide TechFlow

Deep Tide Summary: In the face of recent dramatic fluctuations in the crypto market, a veteran with 38 years of market experience and 13 years of deep involvement in the crypto space shared his journey. He witnessed Bitcoin's meteoric rise from $200 to $75,000, and also experienced countless dark moments of 50% or even 80% net worth drawdowns. Through this article, he conveys a core concept to investors feeling despair and anger: in a long-term secular bull market, volatility is a necessary "entry tax," and true wealth often belongs to those "fools" who can overcome their instincts, steadfastly increase their holdings during times of panic, and hold for the long term.

The market feels incredibly brutal right now; it seems hopeless. It's all over. You missed your chance. You've messed things up again.

Everyone is filled with anger and confusion. Those who foresaw this situation may feel fortunate, but many can also see how deeply such price volatility can hurt people. It feels like the worst of times.

I've been in the market for 38 years (today's sell-off is a nice birthday present, coinciding with my food poisoning last night!), and I've seen all kinds of crashes and panics.

They all felt the same way: damn bad.

I started getting involved with cryptocurrencies in 2013. That was when I first bought BTC for $200.

After I bought it, it rebounded for a while, then plummeted by 75%... and this happened during a bull market that ultimately saw it rise to more than 10 times my entry price. I didn't sell because it was a long-term investment, and I was well aware of the risks.

Then, during the bear market of 2014, it plummeted by -87%.

During the ensuing 2017 bull market, I experienced three sharp sell-offs ranging from -35% to -45%...it was brutal. Due to the Bitcoin fork war at the time, I eventually chose to exit at $2,000 (the previous high from 2013).

By then, my initial investment had already increased tenfold. However, by the end of that year, it had increased tenfold again (!!), before another long and ugly bear market began.

I successfully avoided the entire bear market, which feels fantastic.

But I made a costly mistake: in an attempt to do the "right thing" (buy the dip), I repurchased at $6,500 during the 2020 COVID-19 pandemic crash—3.5 times the price I sold at.

In 2021, BTC also experienced a -50% drop from April to July, and market sentiment was very similar to what it is now. The atmosphere on Twitter was extremely negative back then. Really negative. But the market wasn't actually as oversold as it is today…

By November 2021, the market had returned to all-time highs. SOL rebounded 13 times from its low, ETH doubled, and BTC hit a new high, rebounding 150%.

I experienced it all firsthand. Every heartbreaking, devastating moment occurred within a major secular bull market.

My initial purchase price was $200. The current price is $65,000. In between, I even missed out on a 3.5x increase because I tried to time the market (which I did terribly).

The first key lesson: (For me) the best approach to a secularly rising asset is to "do nothing." There's a profound reason why HODL (Hold Long Term) has become a meme; it's far more powerful than the so-called "four-year cycle" theory.

The second lesson: Aggressively add to positions during a sell-off. Even if I don't time the market perfectly, increasing my total position by averaging into weakness can have a huge compounding effect over time, even more effective than regular fixed-amount averaging (DCA).

I don't always have enough cash to buy in large quantities during every sell-off, but I always buy a little bit because it helps train your mental fortitude.

At times like these, you might feel like you've missed an opportunity, that the bull market is over and everything is doomed. But that's not the case.

Ask yourself two questions:

1. Will tomorrow be more digital than today?
2. Will fiat currency be worth less in the future than it is today?

If the answer to both questions is yes, then proceed. Buy on dips (BTFD) and let "time in the market" beat "market timing," because the former always wins. Adding to your position during a sharp sell-off lowers your average cost basis at higher levels, which makes a huge difference.

Stress, fear, and self-doubt are all "taxes" you should expect on this journey.

Position size is crucial to an individual's risk tolerance. Don't worry, everyone feels their position is too large when prices fall, and not enough when prices rise. You just need to manage these emotions and find your own balance.

Another crucial point is: don't "rent" someone else's beliefs. DYOR (Do Your Own Research) is a very important principle. Without it, you won't be able to get through these difficult times. Earn your own beliefs. Rented beliefs are like leverage; they can wipe you out at any time.

Please remember—when you're busy blaming others, you're actually just blaming yourself.

Yes, the world outside feels dark right now. But the sun will rise again soon, and this is just another scar on your journey (as long as you don't use leverage! Leverage leads to permanent capital loss because you'll lose your casino chips). Never lose your chips.

When will all this be over? I don't know, but I think it's more like what happened from April to November 2021—a panic within a bull market. I think it will end soon. If I'm wrong, I won't change my approach; I'll just keep adding to my positions as long as I have cash.

But for you, the situation might be different. Try building a "least regret portfolio." Can you afford another 50% drop from here? If not, reduce your holdings, even if it feels foolish to do so now. Having the right mindset is key to survival. My mindset has shifted to "how to buy more," while yours might be the exact opposite.

There will always be some market makers who can precisely avoid sell-offs or short selling. Such people certainly exist. But honestly, you just need to tell yourself that these fluctuations are always within expectations. When you anticipate volatility, you won't feel pressured when it happens! It becomes part of the story, not the whole story.

I'm now starting to buy more digital art (which is also increasing my ETH holdings), and I plan to increase my crypto asset allocation next week, just like I have done every time an opportunity has arisen before.

I bought during the COVID-19 sell-off—I bought during every sell-off in 2021, 2022, 2023, 2024, and 2025! And I will do it again this time. Each time, my profit and loss (P&L) has hit a new high before the market. It works like magic. Again… BTFD (Buy the Dip)!

Good luck to you all. This is never easy.

Volatility is the price we pay for this type of asset with long-term compound returns. Embrace it.