You may come across many posts featuring individuals claiming to have made millions of dollars from cryptocurrencies, especially with lesser-known coins. But this is the reality.
Screenshots can be deceiving
Anyone can fake photos or manipulate numbers. Just because someone shares a screenshot doesn't mean they're actually making that much money.
What about the fund?
Consider a scenario where they actually make millions of dollars from a coin with only $3 million in available trading liquidity. This is where things get complicated:
Selling problems
If many people try to sell at the same time, the price of the coin will plummet. Trying to convert those millions of dollars into real cash can result in selling at a significantly lower price.
Lack of money
Imagine you are holding a coin worth $1 million on paper, but there are only $3 million worth on the market. If you try to sell your $1 million worth, there won't be enough buyers to buy it all at once without causing the price to plummet.
Always be skeptical
When you see someone bragging about profits from a low liquidity coin, think seriously. Do they really have the ability to convert those crypto assets into real cash with such limited liquidity?
The bigger picture
Remember, not everyone can make millions from a small coin. If it sounds too good to be true, it probably is.
Always question those profit screenshots. True profits in crypto, especially from obscure coins, are much harder to discern than flashy images might imply. Do your research and consider how likely it is to actually cash out.