Today I saw a post from an old acquaintance, saying that the money made in the bull market not only got completely lost but also resulted in a significant loss of principal. I felt a pang in my heart—this situation is incredibly common in the crypto world.
The crypto world is never short of get-rich-quick myths: turning 100,000 into a million, hundredfold coins achieving financial freedom... But once you really dive in, you find that more people exit in despair amid chasing highs and lows, even losing everything.
Why is this happening? Later I realized that the iron law of wealth in the crypto world is: You will never earn money beyond your understanding. Money earned through luck will eventually be lost due to cognitive deficiencies.
Last year during the Dogecoin frenzy, a friend who knew nothing about crypto jumped in blindly. He said it was just a few thousand dollars, so he didn’t care if he lost. But he bought at the peak, and the price dropped from over $2 to just a few cents, forcing him to cut his losses and lose nearly half. This wasn’t bad luck—it was because he didn’t even know what Dogecoin was. Even if he made money temporarily, he couldn’t hold onto it.
There was also an older brother who made two million in the 2021 bull run by investing in altcoins, bragging everywhere about his sharp insight and urging others to follow. When the bear market hit, he not only lost all his gains but also wiped out his savings. The reason was simple: he didn’t understand profit-taking or stop-loss strategies, didn’t know the project team’s background, and only bet based on the idea that 'everyone else is buying, so it must go up.' Money made by luck is like sand—hold it tighter, and it slips away faster.
The biggest difference between the crypto market and traditional finance is higher volatility, greater information asymmetry, and more scams. Without sufficient knowledge, you’re easily driven by emotions—chasing highs and selling lows, repeatedly getting caught. I made this mistake when I first entered the space: seeing a coin rise 50% in a day, I rushed in without reading the whitepaper or understanding what the project did, only to see it drop 30% the next day and have to cut my losses.
What is knowledge? In my view, it’s understanding the market, evaluating projects, and controlling your own emotions. Do you understand what Bitcoin’s decentralization and scarcity mean? Do you grasp how smart contracts work? These are fundamentals. If you don’t even understand these basics, buying obscure altcoins with names you can’t pronounce is no different than gambling.
Even more important is risk awareness. Many enter the market with the dream of getting rich overnight, but ignore the high risks behind high returns—coins dropping 50% in a day are common, and some even go to zero. I’ve seen too many people invest their entire life savings, only to collapse emotionally when the market fluctuates.
In fact, making money in the crypto market is like fishing in the ocean: you must first learn to swim, know where the fish are and where the reefs lie, in order to safely reach the shore. Knowledge is your swimming skill and compass—without it, you’ll never reach the shore of wealth.
The people around me who have truly made money in crypto all share one trait: they love learning. They study whitepapers daily, analyze projects and market trends, and never blindly follow the crowd. For example, a friend started investing when Bitcoin was around $10,000, believing its value was underestimated. When it reached $60,000, he took profits on part of his position to recover his principal, while holding the rest. That’s the power of knowledge.
In contrast, those who make money through luck always believe that success comes from timing rather than ability. But timing always favors those who are prepared—how could someone who didn't even know what DeFi was in 2020 possibly seize the opportunity?
Another common misconception is herd mentality. When a coin is promoted by a big influencer or goes viral on social media, people rush to buy without thinking: Is the influencer already positioned and waiting for retail investors to take the fall? There are countless such cases—prices are pumped to high levels, then suddenly crash, leaving retail investors stranded.
So in the crypto world, independent thinking is crucial. Don’t just believe what others say—learn to analyze a project’s fundamentals: look at the team, technology, community, and what real problem it solves. These are what determine long-term value, not short-term price swings.
I’ve also taken wrong turns and paid my dues: once I invested in a 'high-end' project with a whitepaper full of jargon and a team made up of top university graduates. I put in a lot of money, only to find out the team vanished and I lost everything. Later I learned the whitepaper was copied, and the team details were fake—this is the cost of lacking knowledge.
Since then, I always spend a lot of time researching before buying any coin: reading whitepapers, checking team backgrounds, understanding community feedback. Though time-consuming, it helps me avoid many pitfalls. In the crypto market, slow is fast—investing more time in learning and research means fewer mistakes in the future and steadier profits.
Ultimately, 'you can never make money beyond your level of understanding' is the most truthful lesson I’ve learned from my time in the crypto world. Those who rely on luck will eventually lose what they’ve gained. Only those who continuously learn and improve their knowledge can steadily seize opportunities.
If you really want to make money in the crypto world, stop dreaming of getting rich overnight. Calm down, start with basics like BTC and ETH, understand market rules and logic. Only when your knowledge is sufficient should you begin investing—then you can truly earn money that belongs to you.
The crypto world is full of opportunities, but also full of risks. It won’t show mercy just because you’re a beginner, nor will it keep favoring you just because you’re lucky. The only thing that can protect you is your level of understanding.
