1. About Returns

If you initially have 1,000,000 funds, when the return reaches 100%, the asset will grow to 2,000,000. However, if you then lose 50%, the asset will fall back to 1,000,000. It is not difficult to see that losing 50% is much easier compared to earning 100%.

2. About Price Fluctuations

Assuming the initial capital is 1,000,000, if on the first day it rises by 10%, the asset will reach 1,100,000, but if on the second day it falls by 10%, the asset will only remain at 990,000. Conversely, if it first falls by 10% on the first day and then rises by 10% on the second day, the final asset will also be 990,000.

3. About Volatility

If you start with 1,000,000 funds, earn 40% in the first year, lose 20% in the second year, earn 40% again in the third year, lose 20% in the fourth year, earn 40% in the fifth year, and continue to lose 20% in the sixth year, after six cycles, the asset will ultimately remain at 1,405,000, and the annualized return over six years will only be 5.83%, which is even lower than the nominal interest rate of a 5-year government bond.

4. About 1% Daily

If the initial funds are 1,000,000, if you can achieve a profit of 1% every day and then exit, after 250 days, the asset can reach 12,032,000, and after 500 days, the asset can grow to as much as 145 million.

5. About 200% Annually

Assuming you initially have 1,000,000 funds, if you can achieve a 200% return rate for five consecutive years, then after five years, the asset will reach 243 million. However, it is important to know that such high returns are very difficult to maintain in reality.

6. About Averaging Down

For example, if you buy 10,000 yuan of a certain cryptocurrency when its price is 10 yuan, and when the price drops to 5 yuan, you buy another 10,000 yuan. At this point, the cost of the cryptocurrency you hold is not the expected 7.5 yuan, but can be reduced to 6.67 yuan.

7. About Holding Costs

Assuming the initial funds are 1,000,000, if you invest in a certain cryptocurrency and gain 10%, when you decide to sell, if you leave 100,000 yuan in market value, the holding cost will become zero, allowing you to hold long-term without pressure. If you are extremely optimistic about this cryptocurrency and leave 200,000 yuan in market value, you will find that the profit ratio will increase from 10% to 100%. However, do not celebrate too early, because if this cryptocurrency drops by 50% later, it is still possible to incur losses.