How are people who trade cryptocurrencies getting wrecked?

Most people get wrecked by using high-leverage contracts and getting liquidated by market manipulation, where the opposing side of perpetual contracts is the exchange. Your losses are the exchange's profits. The traditional way for exchanges to make money is through market manipulation that causes both long and short liquidations. Over time, what happens when there aren't enough retail investors? Exchanges start offering referral commissions, promoting account openings for perpetual contracts. Your losses get shared with the promoters according to a set ratio. Therefore, I always recommend that if you want to trade cryptocurrencies, you should stick to spot trading. If you want to play with contracts, use quantitative trading. Quantitative trading has a complete position management system, which is much safer than manually trading contracts.