Why do some people lose their fortunes in cryptocurrency trading while others achieve financial freedom? The outcomes of cryptocurrency trading can generally be categorized into three types: one loses everything, one achieves financial freedom, and one makes a hasty operation resulting in minimal gains. Let’s discuss these three situations.
The first type is those who lose everything in cryptocurrency trading.
In this situation, many people are eager to get rich quickly, using leverage, trading low-quality coins, or even borrowing money to invest in cryptocurrencies. The volatility in the crypto market is significantly greater than in traditional financial markets, and it’s common to experience a pullback of more than 50%. Those using leverage can face liquidation directly. Alternatively, a low-quality coin can go to zero or a project can run away, leaving the holders bankrupt.
There are also frequent occurrences of lost private keys, exchange hacks, phishing scams, and other security risks and operational errors that should be avoided as much as possible.
The second type is those who achieve financial freedom through cryptocurrency trading.
The principle is simple, but few are willing to become wealthy slowly. The majority of those who achieve financial freedom through cryptocurrency trading are simply hoarders; they only buy Bitcoin and mainstream coins, purchasing whenever they have funds and holding without selling, passively maintaining a full position regardless of volatility. They should not be called traders but rather hoarders, akin to someone buying real estate or gold as a quality asset. In short, it’s about heavy investment plus long-term holding.
The third type involves those who make a hasty operation resulting in minimal gains.
A large portion of this situation consists of smart and diligent individuals who work hard to research various low-quality projects and airdrops, but they often don’t dare to heavily invest in these targets, so their hard work yields minimal profits.
Additionally, there are various swing traders who constantly monitor the market, believing they have avoided minor pullbacks, but can easily be left behind and miss out on major market movements.
Lastly, there are those whose personalities are simply not suited for investing. Investment goes against human nature, but most people chase rising prices and panic sell during dips, entering the market at high prices due to FOMO, cutting losses at low prices, or selling at the first sign of a gain, missing out on significant market trends.
In investing, the cultivation of character is more important than intelligence; let’s cultivate together.
