The biggest pitfall in the cryptocurrency world is those projects that have a "high valuation upon launch, but most of the coins are still locked."
In simple terms: When a coin first comes out, it looks like the price is very high and the market cap is large, seeming impressive. But actually, only a small portion of the coins are tradable in the market; most are locked up by the project team, waiting to be slowly "unlocked" and sold in the future.
What will happen next? (The situation for most altcoins in the spot market)
The price will long-term, slowly, and gradually drop, not a crash, but a stealth decline.
You go long? It won't go up. You go short? The volatility is too low, so you can't make money.
You hold spot waiting for a rise? It's like boiling a frog in warm water; before you know it, you've lost 70-80%.
The way the project team makes money is also very simple:
In a bear market, they continuously sell the coins they hold, as the cost is extremely low, and they can still profit by dumping.
In a bull market, they don't even need to pump the price because the initial valuation of the coin was already set at the peak of the bull market, and selling at fair value allows them to harvest profits.
The result is: retail investors don’t make money in a bull market, and they suffer the most losses in a bear market.
Want to gamble with contracts? There’s no volatility, so you can’t even place a bet.
This kind of design can almost ensure that all participants lose money, making it a "genius" invention in the history of financial plunder.
In simple terms: When a coin first comes out, it looks like the price is very high and the market cap is large, seeming impressive. But actually, only a small portion of the coins are tradable in the market; most are locked up by the project team, waiting to be slowly "unlocked" and sold in the future.
What will happen next? (The situation for most altcoins in the spot market)
The price will long-term, slowly, and gradually drop, not a crash, but a stealth decline.
You go long? It won't go up. You go short? The volatility is too low, so you can't make money.
You hold spot waiting for a rise? It's like boiling a frog in warm water; before you know it, you've lost 70-80%.
The way the project team makes money is also very simple:
In a bear market, they continuously sell the coins they hold, as the cost is extremely low, and they can still profit by dumping.
In a bull market, they don't even need to pump the price because the initial valuation of the coin was already set at the peak of the bull market, and selling at fair value allows them to harvest profits.
The result is: retail investors don’t make money in a bull market, and they suffer the most losses in a bear market.
Want to gamble with contracts? There’s no volatility, so you can’t even place a bet.
This kind of design can almost ensure that all participants lose money, making it a "genius" invention in the history of financial plunder.