Let's understand this through an example:
 
You have 1 million yuan in assets and decide to use 700,000 yuan of it to buy a cryptocurrency.
 
On the first day, the coin fell by 1%, and you lost 7,000 yuan, but you didn't care, thinking that the price would rise sooner or later.
 
On the second day, the price fell by another 3%, and you lost nearly 20,000 yuan, but you still firmly believed that it would rise again.
 
On the third day, the price rose by 2%, and you recovered about 10,000 yuan of losses. Your mood improved slightly, and you felt that everything was under control.
 
On the fourth day, the price of the coin suddenly plummeted by 20%, and you lost 140,000 yuan. You began to feel uneasy and hoped that it would rebound the next day.
 
On the fifth day, the price of the coin rebounded by 5%, and you breathed a sigh of relief, thinking that there were still rules to follow in currency trading.
 
On the sixth day, the price of the coin rose by another 1%. Although the increase was not large, at least there was hope of making a profit, and you felt satisfied.
 
On the seventh day, the price of the coin rose by another 1%, and you began to look forward to the future trend.
On the eighth day, the price of the currency continued to rise slowly, but you remained optimistic and believed that you would get your money back one day. On the ninth day, the price of the currency suddenly plummeted by 30%. You began to panic and wondered if you had chosen the wrong currency. On the tenth day, the price of the currency fell another 10%, and you felt angry and disappointed. On the eleventh day, the price of the currency entered a sideways consolidation period. You saw someone on the Internet saying that this was a bottoming signal. You believed that the market was accumulating momentum and firmly believed that the price of the currency would rebound soon. In the following week, the price of the currency continued to go sideways. You learned more about cryptocurrency online and believed that this was the "main force accumulation stage", so you continued to hold the currency. A month later, the price of the currency not only did not rise, but continued to fall by 20%. You began to feel numb and thought that it would be great if you could get your money back. You decided to withdraw the funds and stay away from cryptocurrency. But things did not go as you wished. The price of the currency continued to fall. At this time, you finally understood the concept of "stop loss". You struggled painfully in your heart, not knowing whether to liquidate or continue to hold. At this moment, one of your friends told you that a new coin has soared by 200% recently, and shared his "leading strategy". You believed it, sold the coins in your hands, and told yourself that you would come back to cover your position after making enough money on the new coin, and hold it for a long time after you get your money back.

Through this process, do you understand the root cause of the loss in coin speculation?

Yesterday, a big shot sent a voice message, saying 'defend for a while'. As soon as I heard it, my heart tightened, and I decided to go all in. As a result, the crypto market plummeted like a waterfall, the red looking as piercing as a fluorescent screen. Looking back, the big shot really is a big shot; they said 'defend', but I mistakenly heard it as 'take a gamble'. Sigh, in the crypto world, a day feels like a year in the human world; this wave has truly made me question life after such a huge loss.

Who really got rich from the cryptocurrency bull market?

In the cryptocurrency bull market, although traders experienced violent fluctuations and highs and lows, the real riches were often those businesses and service providers that provided infrastructure. The "gold rush" in the crypto market is not limited to miners and traders, but more wealth has flowed to companies that provide the necessary tools and services for these activities. For example, infrastructure providers such as trading platforms, blockchain networks, wallet providers, and payment systems have become the real beneficiaries in the market.

Especially in the current cryptocurrency bull market, the hot market of Meme coins has promoted the rapid development of decentralized applications (DApps), especially DApps based on Solana. The surge in trading volume on Solana's decentralized exchange (DEX) has driven record fee income, and Raydium's 24-hour fees exceeded $11 million earlier this month. This phenomenon reflects the huge potential of the cryptocurrency market and reveals the business model of "selling picks and shovels" - those companies that provide infrastructure for cryptocurrency transactions are often the ultimate winners.

This is similar to the historical California Gold Rush. In 1848, the discovery of gold attracted a large number of miners to California, but despite the surge in gold mining, the real fortunes were made by merchants who provided goods and services to the miners.

In the current bull market, not only exchanges and wallet providers have benefited, but stablecoin issuers such as Circle and Tether have also reaped rich rewards, especially in the context of growing demand for stablecoins, acting as a key bridge in the crypto ecosystem. In addition, emerging services such as decentralized finance (DeFi) platforms and liquidity staking platforms have also played an increasingly important role in the market.

However, despite the obvious benefits to infrastructure providers, many experts believe that traders and speculators may still profit from the market frenzy. Market participants who use advanced technology and complex tools can find profit opportunities in price fluctuations through data analysis and strategy adjustments. Therefore, in addition to infrastructure providers, venture capitalists and crypto investors may also reap huge profits in the current market cycle.

A man, driving a brand new Porsche, weaves through the city's neon lights. He is handsome and confident, having changed five girlfriends in a year. After each relationship ends, those ex-girlfriends always complain or boast to their friends: "My ex-boyfriend drives a Porsche!" Thus, the legend of this city began:

Not just these five ex-girlfriends, but all the friends, colleagues, and acquaintances who have heard this phrase also start to think: "If she can find a boyfriend who drives a Porsche, why can’t I?" The inflation of confidence spreads rapidly like economic inflation. Hence, we see scenes like this:

In a café, a few girlfriends discuss: "Do you think that man who drives a Porsche is really the ultimate destination for all women?" In the gym, a girl grits her teeth and manages to do 10 more minutes of squats, just because her friend mentioned her ex-boyfriend driving a Porsche yesterday. In the nightclub, a few girls who just bought new dresses exchange glances: "What’s tonight's goal? To find that man who drives a Porsche, or at least his friend!"

What’s even more interesting is that this man hasn’t done anything particularly special. He has merely left some simple legends in different social circles—those car keys held high, those seemingly casual selfies in the garage, and the luxurious restaurants he casually checks into on social media. Thus, he became the mysterious and attractive "top player" in the minds of women in this city.

However, this "consciousness inflation" also brought unexpected consequences:
Those men who are flaunted as "My ex-boyfriend drives a Porsche," whether they intend to take over or not, feel increased pressure. They begin to wonder if they should also get a better car? And those men who don’t have a Porsche but still hope for love start to be forced into this "illusion economy." From borrowing friends' car keys to taking virtual "luxury car photos," all sorts of operations emerge. Even more amusingly, the sales of Porsches in this city surprisingly increased a little! Even car dealers began to name this phenomenon: "Ex-boyfriend Effect."