henlo

Reminiscing on the last Big Crypto Liquidation: What happened in the past 48 hours in crypto reminds me a lot of May 2021 - the most painful month in my career. After 5 years of working full time in the space, my personal portfolio has gotten to a reasonable size, primarily via a spot buy-and-hold strategy. My stock-picking (or rather, coin-picking) style worked wonders in 2018-2021 when consensus on valuation methodologies was non-existent, and sophistication around things like token dilution was near zero. However, I decided to push my luck and strategy drift by trying my hand at leveraged trading perps. Thankfully this was done with a subset of my portfolio (inspired by the following tweet; story for another time...) In accordance with how I approach any new craft, I was maniacal - outside of my day job as Head of Research at a fund and part-time job building my media business, I spent every other waking moment staring at charts. I chatted with every trader I could reach out to in group chats, not caring about sounding like an idiot. I read every copy of Market Wizards I could find, journaled dozens of pages worth of notes, and at one point was sleeping 4-5 hours on average for a month (my sleep tracker): I was on a hot streak and saw my account skyrocketing (see redacted FTX equity curve below). I couldn't seem to get any calls wrong! Of course, the entire account was wiped within a week. In that month, crypto market lost 40%+ of its value in a single week as $BTC hurtled from $58,000 to below $30,000. Subsequent commentary would attribute the key catalyst as Elon removing $BTC as a payment option for Tesla, citing ESG concerns. Geopolitical heads, on the other hand, would claim China re-iterating its stance against crypto as the primary trigger...despite it being a hackneyed point repeated so many times that "China FUD" had become a meme! TA traders would obsess over the "Wyckoff distribution", swearing it perfectly predicted the selloff. Regardless of the actual reason, the set up was similar to October 2025: general buildup of leverage, stalling prices and complacency - then an external excuse for leverage to fully unwind. The event blew a hole in my work of 4 years in 1 week and taught me lessons I remember to this day. It was the most painful day in my career. I remember it distinctly, as any trader/investor would remember some of their biggest loss days. I was on a Covid "staycation" then and I remember staying up till 3 am closing positions that were massively underwater as my gf slept nearby. On the bright side, I spent the next six months building frameworks and processes around my investment style to make sure anything similar couldn't happen again. Among the many takeaways, I learnt that leverage was not necessary in a high vol asset class like crypto for discretionary directional strategies. I learnt that I hated looking at live PnL and it affected my decision making. I learnt that managing emotional margin is just as important as financial margin, and that my ability to react unemotionally diminishes with lack of sleep. All of these, and many more lessons that came in the 4 years that followed in building my investment company @tangent_xyz , inform how I make decisions on a day to day. Heading into this month, history was rhyming in an uncanny way. I was running low on sleep due to personal reasons, and had stubbornly held onto a wrong market bias as well. Eerily enough I even found myself in a hotel room for a break (not something I do often) as a historic liquidation event occurred again. Exactly like May 2021. Time feels like a flat circle. The key difference this time is due to the people we have assembled at @tangent_xyz, the dissent-driven culture we have cultivated, my off-kilter biases were completely overwritten and we managed to sidestep October 2025's liquidation event as a fund. This is not meant as braggadocio, but to say: looking back, May 2021's rock bottom became my foundation to building anti-fragile processes as an investor, a co-founder, and a manager. The key part of that was in how my colleagues and I structured @tangent_xyz, which allowed disparate opinions to be evaluated by merit, never by rank. Regardless of whether you are a solo trader, a retail participant, or perhaps manage any pool of capital primarily in this weird, degenerate corner of capital markets: if this week was a rough one for you, remember that pain + reflection = progress. The bright side, particularly for those who are early in their investing journeys, is this: in very few other markets would you be exposed to such deep cyclicality and volatility of relative frequency. Some lessons cannot be learnt by reading about them in Howard Marks memos or listening to PTJ podcasts; they need to be experienced first-hand. Many seasoned investors don't "get to" experience these more than once a decade, if that. Note to self: don't let the experience go to waste. Over the past 24 hours I've seen many thoughtful threads on how exchanges should manage liquidation mechanisms, and how oracle design in DeFi should be evaluated. These are also important conversations that drive the space forward. I hope as we look back at October 2025, we see this as an opportunity to improve - not just our processes as investors for those in the speculator class, but the industry as a whole, for all our sakes.