The cryptocurrency market is extremely unfriendly to beginners. There is a lack of strict regulation here, and price fluctuations are severe: it is common for mainstream coins to rise or fall by 10% in a single day, and it is not unusual for niche coins to double or drop to zero in a day. Platforms offering 10x or even 100x leverage can infinitely amplify risks. Newcomers who do not understand the principles misuse it, and even a small fluctuation can wipe out their principal. The market is also filled with pump-and-dump coins and Ponzi schemes, and it is normal for market makers to manipulate prices and harvest retail investors. Those who do not learn cannot escape.
"Not learning + blindly trading" is utterly wrong. Many people buy based on recommendations or low prices, without analyzing the project's value or studying price trends. When prices rise, they are greedy and do not take profits; when prices fall, they are lucky and do not cut losses, watching their profits evaporate or their principal shrink. Some even place large bets, putting all their money into one coin, and if their judgment is wrong, they lose everything. Being swayed by emotions to chase highs and sell lows often leads to buying at high points and selling at low points, repeatedly getting harvested.
Trading is essentially a probability game that requires strategy and discipline. Entering the market without learning is like crossing the street with your eyes closed; it's strange if you don't lose money.
Your experience is a microcosm of retail investors in the crypto world — the more you trade, the less capital you have. After buying Bitcoin in 2020, frequently switching to Ethereum, SOL, and other coins seems like chasing opportunities, but in reality, it dilutes returns. Bitcoin, as a core asset, relies on consensus and liquidity to weather cycles, with returns compounding over time. While the coins you switch to may shine in the short term, they have weak risk resistance. For example, SOL once surged a hundredfold but fell 95% due to vulnerabilities and bear markets, making it hard for retail investors to grasp the cycles.
Frequent switching incurs significant costs: transaction fees and slippage can eat away 10% of your principal after just a few trades. Worse, retail investors find it hard to sell high and buy low, often chasing highs and selling lows, causing their capital to shrink with each buy and sell. What was intended to diversify risk ends up dispersing returns; trading quality assets for high-volatility coins naturally leads to diminishing returns.
The crypto world follows the rule of "seven losses, two breakevens, one profit," with even less than 5% making a profit. The market is a zero-sum game, with institutions having advantages in both capital and information, while retail investors operate based on feelings, becoming targets for harvesting. Most people overestimate their judgment, consuming their capital through frequent trades, which is the norm for retail investors.
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