I dove into the cryptocurrency world in 2020, when the term blockchain was not yet ubiquitous. I witnessed Bitcoin soar from several thousand dollars to sixty thousand and then crash back down. I've also helped institutions manage eight-figure funds, but today I don't want to talk about myths; I just want to break down this circle in plain terms—high returns often come with a much higher risk of going to zero.
1. The Temptation of Cryptocurrency: Why is there such a crowd?
The illusion of 'earning a year's salary in one minute'
The calculation you made is correct: with a principal of 10,000 and 100x leverage, a 1% increase doubles your money. But no one tells you that if there is a 1% reverse fluctuation, your account goes to zero immediately. There are bloggers on Xiaohongshu sharing daily profits of 1.3 million dollars, but at the same time, nearly 100,000 people in the market are liquidated, totaling 111 million dollars. It's like a casino advertising 'someone won the jackpot' while completely ignoring that many others leave in tears.
Anxiety shifts under traditional opportunity shrinkage.
The golden age of real estate is over, the stock market is slow but stable, while the crypto market trades 24/7 with very low thresholds; you can play as soon as you register. Young people in South Korea even see trading cryptocurrencies as a shortcut to class mobility; this 'if I don’t fight now, I’ll be working my whole life' mentality has become a breeding ground for a gambler's mindset.
Cognitive biases under the guise of technology.
Blockchain technology itself has value, but many confuse 'technological prospects' with 'token speculation.' ChatGPT has openly stated that virtual currencies 'carry great uncertainty,' yet more people only want to believe in the fairy tale of 'holding a hundredfold token.'
2. The harsh truth: why do the few always make money?
Leverage is a game of licking honey off a knife's edge.
I have seen too many people chase highs and lows with high leverage, only to have a needle break the support level and directly go bankrupt. The essence of the contract market is zero-sum gaming: every penny you earn is a loss for someone else. Institutions have algorithm and capital advantages, while retail investors place orders based on gut feelings, with success rates comparable to buying lottery tickets.
There are more scams than opportunities.
Mr. Sun was scammed out of 70,000 by 'low-priced tokens,' and there are fake exchanges fabricating K-line data to abscond with funds... Regulatory authorities have long warned: virtual currency operations are illegal financial activities in our country, and stablecoins also have money laundering loopholes. What you think is bottom fishing may be catching the bag; what you think is consensus may be a pyramid scheme.
Emotions are the biggest enemy.
A day in the crypto world is like a year in reality. Instant price fluctuations can easily lead to emotions—greed during profits without taking gains, and stubbornness during losses without averaging down. I once experienced a 30% drawdown in a month, and later realized: discipline is more important than technique, surviving is more important than becoming rich.
3. My survival rule: how to participate rationally?
(Personal opinion, not investment advice!)
You can speculate, but don't invest.
Bitcoin may have long-term value, but most altcoins do not survive three years. I allocate at most 5% of idle funds and never use leverage. Remember: what you earn is liquidity premium, not value growth.
Establish an 'anti-fragile' system.
Position management: single trade risk should not exceed 2% of total funds, never bet all in.
Stop-loss rule: if the price falls below the cost line by 10%, cut losses immediately, do not let small losses turn into big holes.
Take profit strategy: take profits in batches after a 30% gain, leaving a core position to watch the trend.
Beware of the 'myths' on social platforms.
Those bloggers who flaunt profit screenshots may be making money from commissions on trades. Seven departments have made it clear: platforms cannot provide marketing services for virtual currencies. The real earners quietly count their money, only those who want to cut you will shout loudly.
The cryptocurrency circle does not create wealth, it only transfers wealth. If you still want to give it a try, first ask yourself:
Can you accept a total loss of principal?
Can you remain calm during a crash?
Are you willing to spend 100 hours learning the basics?
My attitude is: it’s better to miss an opportunity than to take an unbearable risk. There are no shortcuts in this world, at least not hidden in the traps of K-line charts.
Follow Ake to learn more first-hand information and precise points about the cryptocurrency world; become your own navigator in the crypto space—learning is your greatest wealth!#ETH走势分析 #比特币流动性 $ETH
