Raoul Pal, a 38-year market veteran, discusses market cycles and the role of volatility in long-term investing. With 13 years in crypto, he’s seen BTC swing from $200 to $65,000. Pal says volatility is the cost of long-term gains in a secular bull market. He urges investors to HODL, buy the dips, and avoid emotional decisions. He stresses DYOR and a focus on long-term investing over short-term panic.

Author: Raoul Pal

Compile: Deep Tide TechFlow

Original article link:

https://x.com/RaoulGMI/status/2019541941663285274

Deep Tides Introduction: Facing the recent extreme volatility in the crypto market, a veteran with 38 years of market experience and 13 years deeply rooted in the crypto field shares his inner journey. He has witnessed the dramatic rise of Bitcoin from $200 to $75,000, as well as countless darkest moments where net value dropped by 50% or even 80%. Through this article, he conveys a core idea to investors who feel desperate and angry: in a long-term secular bull market, volatility is the "entry tax" you must pay, and true wealth often belongs to those who can overcome human instincts, firmly add to their positions during panic, and hold long-term—what others call "fools."

The current market feels very ruthless, as if there is no hope. Everything is over. You missed the opportunity. You messed things up again.

Everyone is full of anger and confusion. Those who anticipated this situation might feel relieved, but many can also see how deeply these price fluctuations are hurting 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, right on time with food poisoning I had last night!), and I've seen all kinds of crashes and panics.

They all feel the same:Damn bad.

I started getting involved with cryptocurrencies in 2013. At that time, I bought BTC for the first time at a price of 200 US dollars.

After I bought it, it rebounded for a while, then dropped -75%... and this happened during a bull market, which eventually rose to more than 10 times my entry price. I didn't sell, because that was a long-term investment, and I was fully aware of the risks.

Subsequently, during the bear market in 2014, it plummeted by -87%.

In the following 2017 bull market, I experienced three sharp sell-offs ranging between -35% and -45%... very cruel. Due to the Bitcoin fork war at that time, I eventually exited the market at $2000 (the previous high in 2013).

At that time, my original investment had already earned 10 times. However, by the end of that year, it rose another 10 times ( !! ), after which it began another long and ugly bear market.

I successfully avoided that whole bear market, and it felt great.

But I made a costly mistake: in order to do the "right thing" (buying at a bottom), I repurchased at $6,500 during the COVID-19 crash in 2020 — 3.5 times higher than the price I sold at.

In 2021, BTC also experienced a -50% drop from April to July, and the market sentiment was very similar to now. The atmosphere on Twitter at that time was extremely bad. It was really bad. But the over-sold condition of the market back then wasn't actually as severe as it is today...

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

I experienced all of this firsthand. Every heart-wrenching, soul-tearing moment occurred within a large secular bull market.

My first purchase price was 200 dollars. The current price is 65,000 dollars. In between, I even missed a 3.5 times increase because I tried to time the market (and timed it very badly).

First key lesson:(For me) the best approach for a worldly rising asset is "non-action." HODL becoming a meme has deep reasons, it is much stronger than the so-called "four-year cycle" theory.

Second lesson:Aggressively increasing positions during a sell-off. Even if I can't precisely bottom-fish, by averaging into weakness and incrementally increasing total position size during weak market conditions, the compounding effect over time is substantial, and can even be more effective than dollar-cost averaging (DCA).

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

At such moments, you always feel like you've missed the opportunity, thinking that the bull market will never come back and that everything is going to be over forever.It is not the case.

Ask yourself two questions:

1. Will tomorrow be more digital than today?
2. Will the value of fiat currency be lower in the future than it is today?

If the answers to these two questions are both yes, then keep moving forward. Buy the dip (BTFD), let "time in the market" beat "timing the market," because the former always wins. Adding positions during a sharp selloff will lower your cost basis of the high-position holdings, which can make a huge difference.

In this journey, stress, fear, and self-doubt are the "taxes" you should expect.

Position size is crucial to an individual's risk tolerance. Don't worry, everyone feels their position is too heavy during a decline, and during an increase, they feel they didn't buy enough. You just need to manage these emotions and find your own balance point.

Another key thing is:Do not "rent" the beliefs of others.DYOR (Do Your Own Research) is a very important principle. Without it, you cannot get through these difficult times. You have to earn your own beliefs. Rented beliefs are like leverage, which can blow you out at any time.

Remember — when you are busy blaming others, you are actually just blaming yourself.

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

When will all of this end? I don't know, but I think it's more like the situation from April to November 2021 — a panic in a bull market. I think it will end soon. If I'm wrong, I won't change my approach; I will just continue to add positions when I have cash.

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

There will always be some timing experts who can accurately avoid selling or shorting. There really are people like that. But to be honest, you just need to tell yourself that these fluctuations are expected at any time. When you anticipate the fluctuations, you won't feel stressed when they happen! It becomes just part of the story, not the whole story.

I am now starting to buy more digital art (which also increases my ETH holdings), and I plan to increase my crypto asset allocation next week, just as I have done every time an opportunity has presented itself before.

I bought during the pandemic crash, and I bought during every crash in 2021, 2022, 2023, 2024, and 2025! I will do the same this time. Every time, my profit and loss (P&L) outperforms the market. It works like magic. Let me say it again...Buy the dip (BTFD)!

Good luck to everyone. It's never easy.

Volatility is the price we pay for this long-term compounding return asset. Embrace it.