$BTC $ETH 1. First time entering the cryptocurrency circle: the temptation from spot to contract

In 2020, I entered the cryptocurrency world with a capital of 500,000 yuan. Thanks to the bull market of Bitcoin and DeFi, my assets once grew to 3 million yuan. At that time, I felt that I had mastered the laws of the market and even began to fantasize about "financial freedom."

Until one day, I saw someone in a cryptocurrency trading group showing off his contract earnings—10x leverage, making 1 million a day. At that moment, my mindset completely changed.

"Spot prices are rising too slowly, so contracts are the shortcut to getting rich."

2. The first liquidation: 200,000 yuan in tuition fees

I carefully opened a 5x leverage on an exchange and went long on Bitcoin. I was lucky at first and made 50,000. After tasting the sweetness, I increased my position, but encountered a sharp callback and my 200,000 principal was instantly reduced to zero.

At that moment, my palms were sweating, but I thought to myself: "It's just bad luck, I will definitely make it back next time."

3. Crazy increase: from 1 million to 5 million, and then to liquidation

In the bull market of 2021, my spot assets rose to 5 million. But I was no longer satisfied with making money slowly, and began to indulge in contracts:

  • High leverage: 10x, 20x, or even 50x

  • Frequent trading: opening orders dozens of times a day and staying up late to watch the market

  • Carrying orders against the trend: Don’t stop loss when losing money, and imagine that the market will pull back

Once, when Bitcoin was at $60,000, I opened a 20x leverage to go long. As a result, I encountered the “519 crash” and Bitcoin fell 30% in one day. My 5 million position was instantly liquidated.

Account Balance: 0

4. The collapse after the liquidation: insomnia, debt, self-doubt

During that time, I was completely numb:

  • I couldn't sleep all night, and my mind was full of K-lines

  • I dare not tell my family and can only borrow money to support my life.

  • I even thought about suicide, I felt like a waste.

"Why did I lose everything? I already made 5 million..."

5. Reflection: Why are contracts the graves of 99% of people?

Later, I calmed down and finally understood where I lost:

  1. Leverage is poison: 10x leverage means a 10% fluctuation will result in a margin call, while a 20% daily fluctuation in the cryptocurrency market is common.

  2. Emotions are out of control: If you make money, you want to make more; if you lose money, you want to make up for it, and eventually you become a gambler.

  3. The market is unpredictable: No one can accurately judge short-term rises and falls, and contracts are essentially gambling.

  4. Traps of exchanges: spikes, downtime, slippage… There are ten thousand ways for exchanges to make you liquidate your account.

6. Start over: Stay away from contracts and return to spot

Now, I have completely given up on contracts and only invest in spot:

  • Only buy Bitcoin and Ethereum: Don’t touch junk coins

  • Fixed investment + long-term holding: no longer dream of getting rich overnight

  • Strictly control positions: never fully invest, keep cash for bargain hunting

Although it is difficult to make back your investment, at least it won’t go back to zero.

7. A word of advice to all those who play contracts

If you are still playing with contracts, please remember:

  • The money you earn is only temporarily kept with you and will be returned sooner or later.

  • The exchange is not afraid of you making money, but is afraid that you don’t play.

  • Real investment is about getting rich slowly, not gambling.

8. Conclusion: This is a bloody lesson. I hope you don’t follow my path.

The tuition fee of 5 million made me realize a fact: you can make money in the cryptocurrency circle, but contracts will definitely make you lose everything.

If you are still addicted to high leverage, please stop. There are many ways to achieve financial freedom.