Trading cryptocurrencies doesn’t necessarily lead to losses, but with a "poor person's" mindset, trading cryptocurrencies usually results in losses. For example, if you currently have ten million yuan in funds, just from the perspective of wealth, you can understand that you are not a "poor person." However, if you want to turn that ten million into twenty million in a very short time, or obtain high returns of one hundred to two hundred thousand yuan daily through investments in cryptocurrencies, then your mindset falls into that of a "poor person." Moreover, this kind of thinking will inevitably lead to losses in investments. Why do many people believe they will lose money when investing in cryptocurrencies as "poor people"? Because there is a significant difference between investing in cryptocurrencies as a wealthy person and as a poor person.
1. Many "poor people" trade cryptocurrencies hoping to achieve their dream of getting rich quickly, but for wealthy individuals, entering the crypto space and investing in cryptocurrencies is simply a way to preserve and increase their assets. As a result, after investing in cryptocurrencies, when the price goes up, the "poor people" are reluctant to sell, and when the price starts to fall, they are hesitant to cut their losses. Consequently, not only do they miss out on the opportunity to make money, but they also lose the chance to reduce their losses. In the crypto space, "poor people" chase after rising prices and panic sell, contributing significantly to exchanges and brokers while earning less money. It is important to understand that the more times you trade in the cryptocurrency market, the easier it is to increase your error rate. Once a mistake is made, it is very likely to wipe out all the profits you earned from previous successful trades, and even lead to more serious situations.
2. Wealthy individuals can leverage their investments in cryptocurrencies, continuously expanding their returns on their holdings. Moreover, if the market conditions are unfavorable, or if a certain position cannot be traded anymore, they can utilize their financial advantages to engage in large new position activities. However, "poor people" do not have ample funds to begin with and lack the qualifications to leverage; even if they want to start new positions, they must rely on marks.
3. Wealthy individuals not only have the advantage of capital when investing in cryptocurrencies, but they also have significant advantages in terms of information sources within the crypto space. Wealthy individuals generally have a very wide social circle, making it not too difficult to obtain accurate information related to the market. For "poor people," it is quite difficult to obtain accurate information when investing in cryptocurrencies, leaving them with no choice but to follow the crowd. Sometimes, even if they obtain insider information, it may have been transmitted through several hands, making such information less reliable. If they blindly follow the trends after hearing such information, they might find themselves trapped at high prices, making it very difficult to break free, which is why there is a saying that "poor people" investing in cryptocurrencies tend to lose money nine times out of ten.
4. Wealthy individuals can afford to incur losses when investing in cryptocurrencies; for them, a small amount of money may not be significant, and they have opportunities to start over. However, "poor people" cannot necessarily afford to lose in the cryptocurrency market, but if they do lose, the best outcome may be that they lose their previous profits. If further mistakes occur, they really face the risk of losing money. Moreover, for "poor people," the more losses they incur, the greater the pressure they face. This, in turn, increases their error rate, ultimately leading to irreversible losses. In fact, whether "poor" or rich, when investing in cryptocurrencies, one should have a long-term and unique perspective, not just reduce holdings when prices rise or panic when prices fall. One should continuously learn from others' good insights, enhance their investment advantages, and accumulate experience in the crypto space to learn useful knowledge and achieve financial success.
It has been proven that without the correct direction, no matter how skilled you are, it is useless. Without the correct direction, no matter how much effort you put in, it will have no effect. After experiencing a significant drop in the crypto market for some time, all retail investors are thinking about bottom-fishing at the lowest point, but there may still be lower lows. It is important to know that a bottom is a point, while a trend is a long line. If you do not bottom-fish, you will only lose a point of profit at most; if you bottom-fish incorrectly, you will incur losses equivalent to an entire line. Why compare the length of a point to that of a line? However, it is still necessary to bottom-fish, but this is not absolute; it is relatively low.
