Let's chat about the fascinating world of cryptocurrencies today
In the virtual asset market of cryptocurrencies, filled with magical colors, stories of getting rich with "1000 yuan turning into millions" constantly shock people's nerves. Some claim to have turned a 1000 yuan principal into tens of millions by seizing opportunities during surges in cryptocurrencies like Bitcoin and Dogecoin. These stories seem inspiring, but stripping away the glamorous facade reveals extremely high risks and harsh realities. Theoretically, there is indeed the possibility of assets skyrocketing in a short period within the cryptocurrency space. Take Bitcoin as an example; it was worth just a few cents in 2010, and by 2021, its price once exceeded 60,000 dollars, an increase of over ten million times. If someone had invested 1000 yuan early on, even holding a small amount of Bitcoin, they could achieve astonishing returns at peak times. Additionally, some emerging altcoins and scam coins may also experience dozens or even hundreds of times increases in a very short period due to market speculation, hot events, and other factors. For instance, Dogecoin in 2021 saw its price surge thousands of times within a few months due to tweets from Elon Musk, theoretically providing small investors with a chance to “make a comeback.” However, there is a massive gap between theory and reality. Firstly, the high volatility in the cryptocurrency market is a “double-edged sword.” Virtual currencies lack real value support, and their prices are significantly influenced by market sentiment, manipulation by major players, and policy news. Taking LUNA as an example, in 2022, its price plummeted from nearly 120 dollars to almost zero in just a few days, leaving countless investors with nothing. Even if investors are lucky enough to catch an upward trend, without professional judgment and profit-taking strategies, they can easily lose all their profits due to a sudden crash. Secondly, the high leverage mechanism in cryptocurrency trading further amplifies risks. In pursuit of higher returns, many investors use 10x or even 100x leverage. This means that a 1% reverse price movement could lead to a total loss of the principal. For example, using 100x leverage to invest 1000 yuan means that if the price drops by just 1%, the account will be forcibly liquidated, resulting in total losses. In actual trading, it is common for cryptocurrency prices to fluctuate more than 10% within a single day, and in extreme cases, fluctuations of over 30% may occur, which ordinary investors can hardly bear.
Still, the same saying: If you don't know what to do in a bull market, follow Kui Ge
