He naively believed that the logic of these coins was the same as $TRUMP, and that they could also skyrocket like $TRUMP. So he invested most of his profits into Wife Coin and Son Coin.
But the market did not give him a second chance.
The rest of the family coins quickly went to zero, Li Yi's principal was locked up, and his profits evaporated instantly. Currently, he is starting to inquire about how to buy World Liberty Financial (WLFI, the decentralized finance project of the Trump family) in an attempt to recoup his losses through a new speculative project. "One more gamble, WLFI might be able to carry on the legitimacy of the Trump coin," Li Yi said.
The biggest change in this cycle is that everyone has shown their cards.
No more packaging, no more pretending to be a project with technological innovation, and no need to spend $5,000 to hire ghostwriters to write a fancy English whitepaper and pile up obscure new concepts.
The gameplay of this bull market is simple and brutal - directly hype emotions, celebrities, topics, and cognitive differences. Utilizing the FOMO sentiment, a series of new Altcoins are created, and the fantasies of new investors are exploited for harvesting.
In the past, even the project factories of new chains would make a bit of effort to disguise themselves as seemingly innovative projects. Reviewing the initial launch of BSC, Aptos, and Arbitrum, the market has experienced the same scene - a swarm of anonymous "innovative project factories" capitalizing on the new chain effect to harvest TVL and users, and once the market hype subsides, they directly shut down the community and website, disappearing with the funds without a trace.
Behind these projects are often familiar faces, who simply change their disguise and tweak a few codes to become the new hot coins. They were the first batch of popular projects on a new public chain at the beginning, anonymous and mysterious, without any known investors or big companies auditing, yet they were always hyped by KOLs, relying on the community's FOMO sentiment to create wave after wave of wealth myths.
But now, the market seems to have reached another consensus: this is a new gambling arena, a game of wealth transfer.
No one talks about "technological revolution" anymore, no one talks about "changing the world" anymore, everyone tacitly understands - if you lose this round, just wait for the next round of gambling, the crypto world is meant for this. Apparently, even the nightclub guys in Hangzhou know to short Altcoins now.
And Li Yi, he is just another participant in this wealth transfer game.
Are the short-sellers the winners?
Among the new crypto investors who entered the circle through the Trump coin, the only one who made money and left was Professor L.
In the storm of the $TRUMP coin, most people were betting on the upside, desperately chasing the price higher, and ended up being trapped at the top. However, some people chose the opposite direction - shorting, and successfully profited against the market frenzy.
Professor L, a finance professor and a veteran futures trader, has long studied market structures and knows that the price fluctuations of cryptocurrencies are much more violent than traditional financial markets. As a MEME coin, $TRUMP has no fundamental support and is entirely driven by market sentiment, which means it is likely to plummet after a short-term surge.
But his trading strategy was not simply betting on the market decline, but a basic "hedging" strategy in futures trading:
He bought $50,000 worth of spot to ensure he wouldn't miss out on the upside profits. Meanwhile, he shorted $10,000 worth of $TRUMP contracts with 5x leverage as a risk hedge. If $TRUMP continued to rise, his spot gains could cover the contract losses. If $TRUMP crashed, his short position could offset the losses and even bring in excess returns.
Professor L does not agree with the gambling-style leveraged trading of many retail investors, "The essence of contracts is to diversify risk, not to amplify returns." But most people don't understand this principle.
At the same time, Professor L strongly agrees with Peter Lynch's view: "The big money that shorts does not short at the highest point, but waits until the market has halved, when retail investors say the decline is over and start buying the dips, that's when the short money likes to short." This is precisely why Professor L chose to short after the rapid decline of $TRUMP, rather than rushing to close his short position.
In the crypto groups, there are always people boasting about their high-leverage trading feats: "I opened a 50x short position today and made $2,000!" or "My long position was liquidated yesterday, but I made it back with a short position today!" But the fact is, this strategy is ultimately gambling.
Professor L's success contrasts sharply with those blind high-leverage gamblers. The violent market fluctuations, combined with high leverage, only require one adverse trend to wipe out an account instantly. Many retail investors, when $TRUMP was at its peak, frantically opened long leveraged positions, fantasizing about the price continuing to surge, only to be counterattacked by the market and directly liquidated to zero.
Ultimately, as the $TRUMP price retreated from its peak, Professor L's hedging strategy allowed him to profit steadily. He didn't rely on speed like 0xSun to capture the dividends, nor was he trapped like Li Yi in the FOMO sentiment, but rather, through rational risk management, he survived and made steady profits in the extreme market conditions of the crypto world.
How many pits do new crypto entrants have to step into?
In this Trump coin frenzy, the entrants were not only inexperienced newbies, but also many old players from the traditional investment market. They had been through the grind in the A-share market, commodity futures, and even the tea leaf speculation market, witnessing various capital games.
Professor L was lucky, but not all veterans could replicate their past success in the crypto world. In other words, they had to step into many pits before they could even start trading.
"The A-share market is short-lived bull, long-lived bear, and trading small caps and spreads is the way to survive." This is a consensus among many domestic stock investors, including the "Cake Brother".
Long-term, the speculative nature of the A-share market has accustomed him to short-term wave trading, low-price bargain hunting, and playing on market sentiment.
When the Cake Brother saw a coin like $TRUMP, which had a strong speculative concept, he immediately felt a familiar sensation - "Isn't this just a small-cap stock with high control?" So he decided to "give it a try".
The Cake Brother, who bought more than 4,000 RMB worth of $TRUMP at the $69 high, tried to calculate the possibility of breaking even. As the coin price kept dropping, during the interview with BlockBeats, $TRUMP was $26 per coin, which means if it goes up 5%, he needs to add another 50,000 RMB to lower his cost basis. But he knows this is just a "delusional fantasy of a retail investor".
After being trapped, the Cake Brother realized that the rules of the crypto world are much more brutal than the A-share market: "No price limits, capital inflow and outflow are completely unpredictable, the big players can wash the market instantly; no regulation, market makers can drain liquidity and manipulate the market at will; no time windows, 24/7 trading, the market never rests, retail investors have no chance to catch a breath." The Cake Brother, with some emotions, wished he could rant for three days and three nights.
Many investors who are used to short-term strategies in the A-share market not only failed to make money in $TRUMP, but also ended up losing their principal by repeatedly entering and exiting in an attempt to trade the waves.
But the crypto world is a place that devours people without leaving any bones. After overcoming the culture shock between traditional stock trading and crypto trading, the Cake Brother found that he had stepped into another pit.
"After realizing that I have no hope of recouping my investment, I decided to cut my losses, only to find out that the coins I bought were counterfeit," said Soupie, who had followed the instructions of the group leaders in the trading group and used the web3 wallet of a certain trading platform to make his first purchase of $TRUMP before it was listed on the spot trading platform.
Since he had never used a web3 wallet before, he had only been looking at the prices quoted by the group members, and after making the purchase, he did not actively check it again until he was about to sell. That's when he discovered that his money had never actually entered the real market, but had been swallowed up by a "fake coin contract" deployed by hackers.
This is a relatively simple way of harvesting the crypto newbies, but there are even more pitfalls awaiting "Soupie" in the crypto world.
The mixed-quality crypto discussion groups are like boiling a frog in warm water. They start off free, using attractive photos of female influencers, screenshots of people making money, or photos of people buying cars or houses to attract new users. The group leaders will then enthusiastically teach the newcomers how to open an account and trade on the trading platform, and at this step, the leaders can already earn a commission through the platform's referral program.
Using retail investors' funds to pump and dump or to pay trading fees is still considered relatively mild, the most direct approach is to lead the sheep to the slaughter. They claim to have "accurate inside information," but in reality, it's all a carefully designed harvesting scheme. Another common scam on Little Red Book is the so-called "quantitative trading robot strategy," which promises a monthly return of 30%.
The crypto world is a completely different world. The game here is a high-frequency confrontation measured in "seconds," and every second missed could mean huge losses. Worse, many veteran players, with their ample funds, often adopt a "large-scale capital re-betting" strategy, only to become the "targets" at the "top" of the market. Those big market makers who control the market have already prepared well before these "big fish" enter the market, waiting to quickly absorb their funds.
In this smokeless PVP battle, the flow of funds and the control of the market are always in the hands of a few people. For those players who are still stuck in the traditional market mindset, the rules of the crypto world often catch them off guard. Because here, risks and opportunities coexist, but more often, it's the risks.
When these veteran players come to their senses, they find that not only have they not made a fortune in the crypto world through years of experience, but they have also become the typical "victims of harvest" upon entry. The experience rules they were once accustomed to have become completely useless in this new market.
And all of this is the tuition they have to pay to enter this industry.
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