Author: Evanss6
Compiled by: AididiaoJP, Foresight News
Original Title: When Faith Becomes a Cage: The Sunk Cost Trap in the Crypto Era
At any point in the past, this might have been good advice when talking about cryptocurrency: hoard Bitcoin, or maybe mainstream coins, do some staking, try new products with rewards, and don't get liquidated playing with contracts—chances are you would have made money. Behind this are two core beliefs: Bitcoin will become a more mainstream non-sovereign store of value, and smart contracts will become the infrastructure of finance.
I won't go into detail about how these judgments have been validated, because we need to talk about this "cage." Just two facts:
Bitcoin ETFs have seen $49 billion in inflows, Ethereum ETFs have seen $4.3 billion, and more altcoin ETFs are just getting started. Michael Saylor himself has purchased over $40 billion, and many companies are gradually buying in.
Robinhood just announced it will use Arbitrum's tech stack to build an EVM chain as the backend financial infrastructure for its platform, and will also list the most popular product in cryptocurrency: perpetual contracts.
Cryptocurrency is increasingly resembling traditional finance. It's being bought by the previous generation in brokerage accounts, promoted by Larry Fink, and used by companies like Robinhood with technology. What many of us imagined a decade ago is coming true.
So what exactly is the "sunk cost cage"?
Simply put, it's persisting with something because of past investments. This can appear in many places: your skills, investments you still hold, your relationships, a job you're afraid to quit, or spending all your time on cryptocurrency.
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"I don't want to leave her because our past is too deep."
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"I don't want to change careers because I've spent too much time on this."
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"I don't want to sell my Ethereum because I bought it early, and it's been good to me."
These are all sunk cost fallacies. Not realizing you're thinking this way is a form of self-sabotage, keeping you doing things you know deep down are no longer beneficial.
The sunk cost cage is the modern version of Plato's Allegory of the Cave.
The prisoners only know the shadows on the wall, unaware of where the shadows come from or that there's a larger world outside.
In Plato's allegory, the prisoners stayed in the cave because they mistook the shadows for reality, unaware of a "more real" world outside. In the modern version, we stay not out of ignorance, but because we've invested too much in the shadows. That job that no longer fits, the career you no longer believe in, the identity built on long hours and silent endurance—these are the costs paid. The more time, education, and reputation invested, the harder it is to leave. The illusion is no longer just external; it's internalized as duty, logic, and the "reasonable thing to do."
But freedom isn't cheap. Escaping the sunk cost cage means admitting that what you've built might no longer serve you. Past efforts cannot be the reason to continue staying. Like the prisoner turning towards the light, this requires not only courage but also betraying the part of yourself that is overly loyal to your own investments. The hardest part isn't seeing the truth, but saying goodbye to the self that stayed too long, believed too deeply, and paid the price for the cage.
My Experience
I stayed in a cage for a long time myself.
I fell in love with poker in my teens. In the back row of high school classes, I was always calculating bankroll expectations in a notebook, not listening to lectures or taking notes. Within two years, I went from $0.01/$0.02 micro-stakes to high-stakes tables. Over time, I liked playing less and less, seeing it only as a way to make money, always thinking "I'll quit in another two or three years."
But a decade passed, and nothing changed. I was still playing, still winning, but always felt the money wasn't enough to "do something else." Worse, I didn't even know what else I could do, and I saw clearly: poker was a declining game, and I had to work harder and harder just to keep up. But I told myself I should continue because I had spent so much time getting good, it offered better returns than other options, I had no other viable path, and no time to think—staying a consistent winner in high-stakes online games was exhausting enough: studying strategy, finding good games, avoiding cheats and shady sites...
To be honest, this "can't easily switch careers because it makes money" is a luxurious problem. But as it became harder to find a better industry, I knew the days were numbered.
First Encounter with Cryptocurrency
I encountered cryptocurrency early through my previous career. In 2012, I first read about Bitcoin on a poker forum called TwoPlusTwo. By then, the Bitcoin subforum had been open for over a year.
The first reply was hilarious: "This thing is worth 70 cents now? A currency no one uses can reach this price, lol." The second reply said you could actually exchange it for dollars or buy pizza—these were the early uses of what later became a $2 trillion asset. Scrolling down a few more posts:
"Really missed an era." Anyway, I noticed it because some poker sites started using it. At the time, I thought its $2 billion market cap was outrageous. If it was only for black/gray markets, maybe it was worth that; if it could go mainstream, its value would multiply endlessly.
By 2016-17, as my investments became substantial, I spent more and more time on cryptocurrency (especially ICOs). This diversion of time was my first step out of the cage. But it wasn't until the rise of DeFi in 2020, when you could actually make money, that I fully jumped in.
Back then, I knew nothing about trading and had to learn by doing. I studied economics and math in college, but my real skill was poker. Fortunately, poker is excellent training for trading: it gives you ruthless real-time feedback on decisions, forces you to manage risk, price correctly, develop overall strategy, and builds emotional resilience and soft skills to withstand bad runs—all necessary for independent trading.
In the end, I'm grateful and lucky to have spent a lot of time from 2013-2019 exploring these curiosities, which put me in the best position when the opportunity arose. If I had focused more on poker those years, I might have played better, but following my intuition to formulate a transition/exit plan was truly fortunate.
How does this "cage" apply today?
In recent years, financial nihilism has become increasingly apparent in the crypto circle. More and more people no longer believe in the beautiful ideals they held when they first entered. The goal has become "making money," going all in, working desperately, and "exiting" when you've made enough.
Roughly, there are four camps:
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Green Camp (Believe in Bitcoin, don't believe in other cryptocurrencies)
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Red Camp (Believe in cryptocurrency, don't believe in Bitcoin)
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Brown Camp (Believe in both)
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White Camp (Believe in neither)
Add two scenarios to each camp, and it becomes eight types:
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(a) Believe there is still upside potential, worth the risk
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(b) Believe the upside has already been taken by early buyers
I believe only those in 2(a) should devote all their time to cryptocurrency. If you are in 1(b), 2(b), 3(b), or 4(b), you'd better start diversifying your time and making an exit plan. If you are in 1(a) or 4(a), just hold Bitcoin and don't pay too much attention to anything else. 3(a) can hold some Bitcoin and other assets, splitting time and energy between crypto and non-crypto. If you've seen my account and posts, you can probably tell that I, who was mostly in 2(a) from 2015-2023, am now somewhat wavering between 1(a), 3(a), and 3(b).
Let's talk about the Red Camp. It's been quite painful staying here the past few years.
We've basically been in a situation of continuously rising Bitcoin dominance, even though the overall cryptocurrency system is more widespread. Even if you accurately predicted that the Ethereum ETF would see over $4 billion in net inflows, predicted that giants like Robinhood would use its technology, predicted that Trump would win, reform the SEC, end OCP2.0, and create a pro-crypto environment. From the day the ETF launched, your Ethereum investment is still down. And today Ethereum is around $2600, investors from 2015 are up 2000 to 8600 times.
So the answer
I doubt whether "perseverance," as Mippo said in the tweet at the beginning of this article, is really the right path, the biggest opportunity. Everything you dreamed of has either already happened or is on its way. In 2017, if Robinhood announced developing on Ethereum, the price would have jumped 10% immediately, but now it's different. The move now is to buy HOOD stock. I believe there are still opportunities in cryptocurrency, but the trend of opportunities being taken by non-crypto assets (stocks) or insiders (teams/private investors, look at Celestia Finance) is not friendly to dreamers. If you really want to "persevere," you have to invest in these projects early or build them yourself. So Mippo isn't wrong, solving real problems in crypto is still an opportunity. But don't think that just because crypto technology is becoming widespread, current coin prices will necessarily rise (especially compared to other assets you could invest in).
Unless you are a true Red Camp diehard 2(a), "perseverance" is choosing to stay in the cave watching shadows on the wall, while people outside are already working on AI and robotics.
You'd better honestly ask yourself: Which camp are you in? Do you even like cryptocurrency? Regardless, try to cultivate some skills that are also useful elsewhere, so if it doesn't work out, you have a fallback. At the very least, you won't be unhappy from spending all your time on something you're already tired of. And if you're wrong, you have a soft landing place.
The door of the sunk cost cage isn't locked; what traps you is your own thoughts. All you need to do is open the door from time to time and walk out. Life is beautiful, the world is full of possibilities.
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