The wealth in the cryptocurrency world often fluctuates like a roller coaster, and the reason why some people can go from rich to poor ultimately boils down to one thing—contract liquidation.
I have been in the cryptocurrency world for four years and have witnessed the ups and downs of many former 'old OGs.' Those investors who once had the wealth of A8 and A9, full of ambition, have long achieved financial freedom in the contract market. Over the years, they have succeeded in almost every operation, accumulating substantial wealth. However, a single contract liquidation eventually caused their account balances to drop to zero in an instant, and all their previous efforts and wealth were washed away in an instant.
On social media, screenshots of contract liquidations can be seen almost daily. Moreover, many people post confessions after liquidation, recounting how their greed, luck-driven mindset, and blind operations led to their assets being wiped out overnight. Yet even so, there are still a steady stream of people entering the contract market because the temptation of earning high profits is simply too great!
In the contract market, the speed of making money is indeed astonishing. As long as the direction is right, turning $100,000 into $1 million is almost within reach. But once the direction is wrong, you have to start over. Although theoretically, each contract trade has a 50% win rate, which seems rational and clear in terms of probability, once you enter the market, almost no one can remain rational. Once a gambler's mentality takes hold, it often becomes impossible to stop losses in time, and losses turn into the motivation for 'one more time,' resulting in continuous increasing bets and ultimately leading to liquidation.
For example, the recent severe fluctuations in the crypto market saw a sudden drop within 4 hours, leading to approximately $331 million in funds being liquidated across the network. Among them, the liquidation amount for long positions reached $244 million, with over $54 million in losses from XRP contracts alone. The South Korean exchange experienced a temporary outage, causing the price of BTC to drop to $60,000 at one point. Anyone who can predict that the market will suddenly experience a severe fluctuation or even an event like the 'Korean Martial Law' can witness dramatic swings in the crypto market, leading many players' accounts to ultimately pay the price.
The uncertainty and volatility of this market often make investors' fates so elusive. No matter how strong your judgment is in the market, the outcome may ultimately hinge on a moment in time. Contract trading is indeed not easy; it is even a game against one's own psychological resilience and risk control ability.
Contract trading is full of opportunities but also fraught with risks. The market's rapid changes can make you rich overnight or lead to instant bankruptcy. A small misstep can plunge you into the abyss of liquidation. Therefore, before entering this market, one must deeply understand the risks, always remain calm, and avoid making wrong decisions due to momentary impulses and greed.