Brothers, the market has been quite lively lately. AI + crypto, RWA, and L2 sectors are being hyped one after another, and many people are getting excited and want to take risks again. But I want to pour a little cold water on everyone: behind the revelry, risks are quietly accumulating! Some institutions have already issued warnings that the 'everything bubble' may burst in 2026, and the MOVE index is a key warning signal. As an analyst who has seen three bull and bear markets, I am very aware of how terrifying the risks are when the market is crazy. Today, I will talk to you about the four biggest pitfalls to watch out for in 2026 and how to avoid them. After reading this, at least it can help you preserve your principal.
The first big pitfall: the leverage trap of yield-bearing stablecoins. In 2025, I don't need to say how hot yield-bearing stablecoins are; some platforms, with their complex treasury strategies, can offer annualized returns of 20%-60%, attracting billions of dollars into the market. But behind the glamour lies danger. Stream Finance's XUSD collapsed to $0.18, evaporating $93 million of user funds; Elixir's deUSD went to zero due to large loan defaults. These cases illustrate that high returns come with non-transparent collateral and excessive leverage; once the market fluctuates, it will inevitably crash. In 2026, everyone must stay away from yield-bearing stablecoins with annualized returns exceeding 20%; don’t let high returns cloud your judgment.
The second big pitfall: tokens with high FDV and low circulation. 2025 has already proven that these types of tokens are structurally non-investable. Many projects use low circulation to pump prices, creating false prosperity to attract retail investors. Once unlocked, the stock price will inevitably plummet. I have seen too many retail investors get 'cut' by these tokens; the K-line trends look good, but upon buying, they get trapped, ultimately losing everything. Judging these tokens is simple: look at the ratio of FDV (Fully Diluted Valuation) to circulating market cap; if the ratio exceeds 5 times, stay away. In 2026, the market will be more rational, and this 'cutting leeks' strategy will inevitably be eliminated, but before that happens, many will still fall for it, so everyone must be vigilant.
The third big pitfall: projects in regulatory gray areas. Currently, global regulation is diversifying; some places have clear regulations, while others are in a vacuum, such as the crypto OTC trading in Montenegro, which is all cash transactions and has money laundering risks. Although legislation has been initiated, progress is slow. Projects in such places may have speculative opportunities in the short term due to loose regulations, but the long-term risks are immense. Once policies tighten, these projects are likely to go to zero. In 2026, regulations will become stricter, and you should never touch projects operating in regulatory gray areas; the safety of your principal should always come first.
The fourth big pitfall: AI + crypto air tokens with no real-world application. AI + crypto is the big trend for 2026, but this does not mean all related projects will make money. There are still many AI + crypto projects on the market that have no real progress other than white papers and financing news; they are just stories to deceive people. To determine whether an AI + crypto project is just a bubble, focus on two points: first, is there a real technological breakthrough? Second, is there a real application scenario? Projects like the x402 protocol that can achieve real-time payments with AI Agents are truly valuable; those that only shout slogans should be avoided.
After discussing the risks, let's talk about how to avoid them. First, be sure to control your position; do not invest more than 30% of your funds into the crypto market, and do not use leverage. Second, only invest in projects you understand; if you don’t understand something, it’s better to miss out than to make a mistake.
Finally, let me say something from the heart: in the crypto market, preserving your principal is more important than how much you earn. Although there will be many opportunities in 2026, the risks are equally enormous. Once the 'bubble of everything' bursts, many people will lose everything. Everyone must remain rational and not be swayed by market emotions. If you currently feel helpless and confused in trading, and want to learn more about the crypto space and get firsthand cutting-edge information, follow me@标哥说币
