Recognize the Risks, Invest Cautiously: Lessons from the Crypto Assets Market

In the field of Crypto Assets, a single mistake can lead to huge losses. Most participants are simply riding the wave of the times, enjoying the dividends brought by the industry's development.

Recently, another digital currency trading platform has erupted in crisis. The platform's founder publicly stated that the platform is currently unable to fulfill user withdrawal requests, involving amounts as high as hundreds of millions of dollars. This incident once again highlights the high risk of the Crypto Assets market.

Many investors have suffered heavy losses. Some have lost all their savings and even incurred huge debts; others had to sell their properties to cope with the crisis; and some saw their ten years of savings vanish in an instant. Among them were investors who had already suffered losses in other financial products, facing familiar blows once again. It is reported that the highest loss for a single investor has even reached the tens of millions.

These experiences deeply reveal the vulnerability of middle-class wealth:

1. They think they have substantial assets, but in reality, they only have a little savings, and a sudden change could bring them back to poverty.
2. They mistakenly believed they were engaging in value investing, but in reality, they fell into speculative gambling.
3. They pursue high returns, dream of financial freedom, but ultimately become stepping stones for others to get rich.

In the cryptocurrency market where effective regulation is lacking, some illegal activities are more likely to thrive. Here are several common fraud schemes:

1. Transaction Mining and High-Yield Financial Management

Some platforms have launched what is known as "trading mining" model, promising high returns. However, in essence, this model is often a disguised ICO, where investors exchange valuable Bitcoin for zero-cost tokens issued by the platform. There may be a prosperous scene in the early stages, but once the funding chain breaks, it will collapse rapidly.

High-yield investment products also come with risks. Some platforms claim to offer annualized returns of up to 18%, but in reality, it is difficult to generate enough real returns to pay these interest rates, which may ultimately evolve into a Ponzi scheme.

2. Air coin bubble

Many people were attracted by the wealth myth of ICOs in 2017, hoping to get rich by investing in emerging tokens. However, most of these tokens are actually worthless, relying entirely on hype and pyramid-style marketing. For the issuers, these tokens have almost zero cost, and as long as they are packaged attractively enough, they can become cash machines. Ordinary investors can only hope that someone will buy it at a higher price, ultimately likely leading to significant losses.

3. High Leverage Contract Trading

The leverage ratio for contract trading in the Crypto Assets market can reach up to 125 times, far exceeding that of traditional financial markets. With such high leverage, even small price fluctuations can lead to liquidation. Coupled with factors such as market manipulation and platform failures, this trading method is extremely risky. Many people tend to become more aggressive after tasting success, ultimately losing all their profits and even incurring substantial debts.

These scams and high-risk investments succeed repeatedly mainly by exploiting human weaknesses, especially the desire for sudden wealth. When hearing about others profiting from Crypto Assets, many people impulsively invest out of envy or frustration, ultimately becoming victims.

It is worth noting that currently, only a few crypto assets such as Bitcoin and USDT have actual applications in the field. Most other tokens are either hype concepts or pure scams. Even Ethereum's actual computing power is far less powerful than what is advertised.

In the face of such a market environment, investors need to:

1. Learn to restrain yourself and do not expect to get rich overnight. As Buffett said, true wealth accumulation is a slow process.
2. Avoid "liquidation". In the current economic environment, a significant mistake can leave one with no chance of recovery.
3. Recognize your own limits and do not take blind risks.
4. Cherish existing assets and invest cautiously.

Everyone's starting point and opportunities are different. What matters is finding a development path that suits oneself, recognizing one's own capabilities, and continuously working hard within that range. Remember not to take risks and cherish everything you currently have.