Recently, I’ve been pondering a question: why do so many people struggle with going long and going short? There’s actually a deep market logic behind it.

Let’s start with the appeal of shorting. Some people say that if you only go long, you won’t have opportunities to profit when the market falls. Plus, shorting can leverage contracts, and if technical analysis can predict rises, theoretically it can also predict declines. Add in the sense of superiority that “truth is in the hands of a few,” and shorting indeed has a kind of magnetic allure.

But I later realized that in the cryptocurrency space, the advantages and disadvantages of going long and short are actually fundamentally asymmetrical. That’s the key issue.

Looking at the data makes it clear. Bitcoin rose from $134 in April 2013 to $47,047 in August 2021, a 350-fold increase. During these more than eight years, the number of days the price went up and down was almost evenly split (54% of days closed higher). What does this mean? The magnitude of gains and losses is completely disproportionate. When you profit from shorting, you can only make small gains; but when you lose, it’s often a big loss.

More critically, shorting is essentially a deflationary profit model. If you go long with $100 and the price rises from $1 to $50, you end up with $5,000. But if you short $100 and the price drops from $50 to $1, you only make $198. Even with leverage, the profit ceiling for shorting is limited, whereas going long has no such cap.

There’s also another often overlooked point — this industry is still in its early stages, and the long-term trend is upward. Going long is riding the trend, while shorting is going against the small trend and opposing the big trend. To put it plainly, even if you make money from shorting, it’s just like picking up coins in front of a bulldozer.

Someone asked, should we short during a bear market? My answer is no. The three issues with shorting — low risk-reward ratio, profit deflation, and going against the big trend — all hold true in a bear market as well. Shorting is like poison; no matter how long you drink it, it doesn’t change its nature.

So what is the correct approach? It’s not necessarily choosing between long or short, but adjusting your position based on market conditions. When the trend is clearly upward, hold 70% to 100% of your position; when it’s clearly downward, hold 30%; and when uncertain, hold 50%. This way, you profit during rises and accumulate coins during declines, allowing for both offensive and defensive strategies.

That’s why I always choose to go long. Not out of faith, but based on rational market logic.