What I learned losing 40% in a week

BASE LAYER // Issue #8
Clarity for long-term crypto holders.

GM everyone.

A few years ago, I bought into a project I believed in.

Smart team. Solid fundamentals. Tokenomics that made sense.
One of those early bets you brag about if it works.

And for a while, it did.

Then came the eventual dip.

-10%. Fine.
-25%. Annoying, but I “had conviction.”
-40%… and that’s when things got weird.

Not in the market—in me.

Because I wasn’t just staring at a red chart anymore.
I was staring at the part of me that couldn’t think clearly under pressure.

The problem was: I didn’t have conviction. I had exposure.

And conviction feels smart—until it gets expensive.

I told myself I was “early.”
I told myself I “believed in the team.”
I told myself I wasn’t a paper hand.

But deep down? I didn’t have a plan.
I had hope dressed up as confidence.

And the price action exposed it.

I didn’t know:

• How much of my net worth this position actually represented

• What I’d do if it dipped more

• Whether I was holding because I believed—or because I didn’t want to admit I was wrong

No one tells you this, but I will: in crypto, there’s no such thing as “just HODL” unless you pre-committed to HODLing.

If you’re reacting in real time? You’re not holding with conviction.
You’re just frozen.

So I built a new system.

It’s simple. I call it my Conviction Filter.

Every position goes through these 3 questions:

1. If this 2x’s, what % will I sell?

Clarity removes panic. I write down a laddered exit plan before I enter.
If I can’t imagine selling it ever? Red flag.

2. If this drops 50%, what will I do?

Will I DCA? Cut? Sit still?
If I haven’t answered this before it happens, I’ve already lost control.

3. What does this position represent in my overall life?

Is this a strategic bet, or a personal crusade?
Is it 2% of my net worth, or 20% of my ego?

This framework changed how I invest.
Because now, I never confuse belief with blind spots.

What I do before I enter matters more than what I do after.

Here’s how I think about it:

If you’re building your crypto strategy on emotion, you’ll make money by accident and lose it on schedule.

If you’re building it on structure, you’ll miss some moonshots… but you’ll keep the wealth you build.

Because crypto punishes people who think clarity is optional.

The best investors know:

• What they’re optimizing for

• What risk actually feels like

• How to make a move, then not touch it again for weeks

The point isn’t to win every bet.
It’s to stop making bets you don’t understand—and can’t hold when it matters most.

Because one day, your best pick will be down 40%.
And the market won’t care how smart you sounded on Twitter.

Only you will know if you built the foundation right.

So write down your rules before the next trade.

Because when you’re calm, you write the script. And when you’re panicked, the market writes it for you.

– Alex
Founder, Base Layer