It once rose 3,550% and eventually fell 97.26%. Retail investors who don’t understand this might wonder why the drop is only that much. When the price gets closer to the floor, a drop of 0.something percent can amount to multiples of 100%, even up to 1,000%.
“Wow, this coin has already risen +3,550%. If it’s now down -97%, that means I’m still way ahead, right? Or if it’s down -97%, it hasn’t reached -100%, so it’s still safe.”
This is called the percentage asymmetry trap, which often leaves retail investors collectively wiped out.
As the price gets cheaper, decimal fractions become crucial. So a one- or two-digit drop in the last decimal places may be small in percentage terms, but in real value—or relative to your capital—it can mean losses of hundreds or even thousands of percent when using leverage (Futures), or it can wipe out the remaining capital of retail investors entirely.
$AKE #BinanceSquare
“Wow, this coin has already risen +3,550%. If it’s now down -97%, that means I’m still way ahead, right? Or if it’s down -97%, it hasn’t reached -100%, so it’s still safe.”
This is called the percentage asymmetry trap, which often leaves retail investors collectively wiped out.
As the price gets cheaper, decimal fractions become crucial. So a one- or two-digit drop in the last decimal places may be small in percentage terms, but in real value—or relative to your capital—it can mean losses of hundreds or even thousands of percent when using leverage (Futures), or it can wipe out the remaining capital of retail investors entirely.
$AKE #BinanceSquare
