I recently saw a share from an old friend, and all the profits made during the bull market have been completely given back, even losing the principal. When I saw this, I felt a bit upset—this kind of thing is really too common in the crypto world.

Everyone has heard those stories of getting rich overnight: turning 100,000 into millions, a small coin skyrocketing a hundredfold, achieving financial freedom through crypto assets... But only when you actually jump into this market do you realize that most people never even reach that moment; they quietly exit amid the repeated cycle of chasing gains and selling losses, some even losing everything.

Why does this happen? I later understood a principle: the crypto world always demonstrates an iron law— you can't earn money beyond your level of understanding. Profits made by luck will ultimately be lost due to insufficient knowledge.

Last year's $DOGE hype, I had a buddy who didn't really understand cryptocurrencies. He said it was just a few thousand bucks, just playing around, no big deal if he lost it. As a result, he bought at the top, and the price dropped from over two dollars to a few cents, finally forced to cut losses, losing almost half. This isn't a matter of luck; fundamentally, he had no idea about the logic of Dogecoin. Even if he made some money temporarily, he couldn't hold onto it.

I also know a big shot who, during the 2021 bull market, made over two million by investing in altcoins. He would go out every day bragging about how accurate his judgment was and urging others around him to follow suit. When the bear market came? That two million evaporated entirely, even wiping out his years of savings. The reason is straightforward: he had no idea what taking profits or cutting losses meant, knew nothing about the background of the project teams, and just threw money in based on the childish logic of "so many people are buying, it must go up." Profits earned by luck are like sand in your hand— the tighter you grip, the faster it slips away.

Compared to traditional finance, the biggest feature of the crypto market is its savage volatility, highly asymmetric information, and an astonishing number of traps. Without enough deep understanding, it's too easy to be driven by market sentiment— chasing gains and selling losses, then repeatedly getting harvested. When I first entered this circle, I also fell into a trap: whenever I saw a coin surge 50% in a day, my mind would heat up, and I wouldn't bother reading the white paper or understanding the fundamentals, just thinking about jumping in quickly.