I recently came across a set of economic data that directly changed my understanding of market cycles. In 1995, Japan's GDP reached $5.55 trillion, far surpassing the combined total of other Asian countries at $4.19 trillion, making it the regional hegemon at the time. Fast forward to 2025, Japan's GDP has fallen to $4.28 trillion, actually being overtaken by three domestic provinces and cities (Jiangsu, Shanghai, Zhejiang, and Fujian combined at $4.76 trillion). Over a span of thirty years, from absolute dominance to being partially surpassed, this reversal is more shocking than the bull and bear markets in crypto.

Having been involved in the crypto space for many years, I’ve seen too many people get wiped out due to misjudgments. Today, I want to analyze the case of Japan’s economic recession to uncover the underlying patterns behind seemingly unsolvable market dilemmas.

Why did Japan crash? On the surface, it looks like the bubble burst in the late 1980s, but the real fatal blow came later. After trade conflicts caused stock and real estate markets to plummet, how did Japanese companies respond? Many expanded overseas to build factories and avoid tariffs, resulting in the gradual hollowing out of domestic industries. Meanwhile, the country entered a deleveraging cycle, with market liquidity rapidly shrinking. Coupled with the long-term pressure of an aging population, both consumption and labor supply shrank simultaneously, ultimately leading to the so-called "Lost Thirty Years."

The core issue isn’t the sudden shock itself, but how it is responded to afterward. Japan made a fatal mistake: in a trend that had already shifted, it stubbornly clung to past success stories and refused to make strategic adjustments until it was completely phased out by the market.

What does this have to do with crypto investing? It’s huge. How many people still believe in the logic of "holding long-term for guaranteed profits"? What they fail to see is that Bitcoin has entered a bear market cycle, and the market’s liquidity structure is changing. Yet, these people still cling to yesterday’s routines, unwilling to cut losses or adjust their positions in time. This is exactly the same thinking trap Japan fell into back then.

The operational logic of the crypto market and traditional economies is actually interconnected: once a market cycle shifts, past success stories become shackles. Some strategies can make money in a bull market, but applying the same logic in a bear market often results in repeated losses. I’ve seen too many people get wiped out for this reason, because they refuse to believe that the "Lost Thirty Years" could happen to them too.

The key is to learn how to recognize signals of market change. When you see mainstream strategies failing, liquidity drying up, and participant sentiment shifting, you must be mentally prepared. This isn’t pessimism, but a basic survival rule. It took Japan thirty years to climb out of that quagmire. Crypto cycles are much shorter, but their destructive power is equally formidable. Instead of holding onto the hope that "this time is different," it’s better to actively adapt to changes and adjust strategies in time. That’s the secret to surviving longest in crypto investing.