The Risks and Lessons of Crypto Assets Trading

In the field of digital currency, there are many painful lessons worth reflecting on. This article will share two real cases to warn investors to act with caution.

Case 1: The Pitfalls of Futures Trading

An investor who started engaging with Bitcoin in November 2013 recently disclosed his debt situation. His experience fully demonstrates the risks of investing in Crypto Assets.

This investor initially treated digital currency as a form of entertainment and made a small profit in 2014. However, starting in 2015, he became addicted to Crypto Assets futures trading. At first, he borrowed 5 bitcoins for trading and once made over 600,000 yuan. But the good times didn't last long, and he eventually fell into a quagmire of massive debt.

He continuously borrowed more funds and Crypto Assets for futures trading, including 657,000 yuan, 11 bitcoins, 100 ethers, 2,000 classic ethers, and 500 litecoins. Despite the losses, he still held onto the illusion of recovering his losses through futures trading, which ultimately led to total loss.

This case highlights several key risks of Crypto Assets investment:

1. Buy high and sell low
2. Overuse of leverage
3. Blind Financing
4. Frequent Short-Term Trading

In contrast, a robust investment strategy should include:

1. Work steadily
2. Only invest with spare money
3. Long-term holding
4. Maintain a healthy lifestyle

Profiting in a bull market often involves a significant element of luck. Overindulgence in futures trading may bring temporary pleasure, but in the long run, it can ruin a person's life. Worse yet, this behavior may lead to a loss of trust from others, making one a person of no integrity.

Case 2: The Importance of Wallet Security

Another case involves an investor inadvertently leaking their wallet mnemonic phrase in a WeChat group, resulting in the risk of theft for Crypto Assets worth hundreds of thousands.

The investor accidentally sent the mnemonic phrase to a WeChat group with over a hundred people while backing up the wallet information. Realizing the mistake, he quickly took action and transferred most of his assets. However, during this process, a small portion of Ethereum was still transferred away by others.

Fortunately, most group members did not take the opportunity to steal funds. Through the blockchain explorer, this investor successfully tracked down the thief's address. Ultimately, he transferred the remaining assets to a secure address in time before the official unlocking of other tokens.

This case reminds us:

1. The importance of mnemonic phrases cannot be ignored, and do not transmit them through online tools.
2. The best way to correctly back up your mnemonic phrase is to write it down by hand.
3. Blockchain transactions are not completely anonymous, and transaction records can be queried on a block explorer.
4. In case of an emergency, take prompt action and seek reliable help.

In a decentralized digital world, it is crucial to protect your private keys and mnemonic phrases. Leaking this information could lead to serious financial losses.