We use proof by contradiction. Let’s assume that most people in the crypto space are making money while a few are losing. What would happen in such a scenario?
The market is a place for trading; the market itself does not create profit. Holding Bitcoin does not yield gains.
The so-called money-making from trading coins actually happens during the process of you buying while I sell. In reality, some traders obtain funds from other traders; it is merely a process of fund transfer. Simply put, if you can make money, it means someone is buying at a high price. While you earn, someone else must be losing.
Assuming there are ten participants in the crypto space, each with 10 dollars. If only a few make money, let’s say one person earns 2 dollars from the other nine. This person will have 28 dollars, while the other nine will each have 8 dollars, and the game can continue. But if most people make money, nine people earn 2 dollars from one person, the nine will have 11 dollars, and that person not only loses all but also owes 8 dollars, making it impossible for the game to continue.
Only a few people can make money for the market to sustain itself; if most people make money, the market will collapse.
This is similar to the logic of a lottery. If most people win, the lottery company cannot continue to operate. Only when the majority do not win and a few do can the lottery company sustain its business.
Therefore, the crypto market will do everything possible to allow a few people to make money while the majority lose.
So, how can one become part of the small group that makes money?
1. 80% of investors lose money, and 20% of investors make money. Given this, you are likely to lose money. If you lack professional investment skills, you are just 'chives' in the crypto space, and if not you, then who will be cut? Investment carries risks; it's safer to give up.
2. 80% of investors' returns do not beat Bitcoin, and only 20% can barely exceed Bitcoin. You are destined to likely not beat Bitcoin; if you do not have a strong vision, do not chase hot coins. Steadily hold mainstream coins like Bitcoin, Ethereum, etc., and eventually, you will find that you have surpassed most people.
3. 80% of people know nothing about tokens, while only 20% grasp the rules of the crypto space. Most people only know the letter symbols of coins, are completely ignorant about blockchain technology, yet wish to profit from it. To make money, first enrich your knowledge and improve your understanding; this will directly affect your investment outcomes.
4. 80% are short-term investors, and 20% are value investors. Apart from short-term experts, the frequent trading of the vast majority is the best way to bankruptcy. If you don’t understand, don’t operate recklessly, and don’t always think about speculation; you are not suited for it. Steadily hold valuable coins and wait for a bull market, then transfer the risk to others at high prices.
The 80/20 rule is a universal law in nature and society. In the crypto space, it means that a few are destined to earn the majority of the money from others, which is an unchanging principle. It validates the 'Matthew Effect' and reveals a harsh reality: unfairness is an objective law of human social development.
The 80/20 rule is a fate that individuals cannot escape. We cannot change this law, but we can choose: to accept 80% mediocrity or strive for 20% success.
In the end, I hope all my friends who pay attention to me and those who see this can become part of that small 20%!