Why Are Most Meme Token Investors Destined to Lose Money?

A few weeks ago, I published an article titled "Stick to Your Investment Philosophy, or You Will Face Losses." Surprisingly, it seems that very few people have a clear investment philosophy, and worse, almost everyone is losing money. For those experiencing the cryptocurrency cycle for the first time, welcome to this uncertain market. If you try to go against the market leaders, the results are often unsatisfactory. Recent popular Meme Tokens are a good example, but this is just the surface.

I want to emphasize again: if you view the cryptocurrency market as a casino, it will view you as a gambler.

In traditional casinos, only about one-fifth of players can profit from slot machines. This means that the vast majority are losing— even the so-called "winners," if you calculate their losses before winning, may actually not be making a profit. Suppose you invested in a series of Meme Tokens, and after experiencing multiple losses, you finally achieved a significant gain. What happens then? You might think you are special and feel like you have found the winning formula. However, the reality is that your success could simply be a coincidence, and if you continue to operate this way, the market will eventually take back your gains.

The Meme Token market attracts investors through airdrops, promises of thousand-fold returns, and the lure of luxury goods, much like how casinos entice gamblers with free dining and dreams of financial freedom.

The market sets the rules, allowing you to participate until they decide to take you out. Opinion leaders on social media may pump the price of a certain Token and then quickly abandon it.

When you experience losses, the market will sell you the fantasy of "getting rich overnight," and Meme Tokens have a similar effect, only with a lower probability of success.

From a mathematical perspective, why do most people tend to lose money? This can be explained by the law of large numbers. As the number of trades increases, your results will get closer and closer to the expected average. In speculative markets, the expected average often means losses. The entire market and trading system are built around this principle. The more times you participate, the more your personal results tend to align with the overall market trend.

This can be understood as follows: if you flip a coin 10 times, you might get 7 heads and 3 tails – anomalies are likely to occur in a small sample. But if you flip it 1000 times, the result will be much closer to a 50/50 probability. The same logic applies to investing in Meme Tokens. You might be lucky to profit in one or two trades, but after enough trades, the results usually revert to the average. The reality is that a few people may become wealthier, while the majority may face significant losses.

So, how can one become a winner?

1. Enter the market early - but be aware that even the smartest individuals find it difficult to accurately grasp the timing of exit, and entering early is almost impossible.

2. Becoming an insider trader - this is an unethical and illegal behavior.

3. Becoming an influential person to manipulate the market - equally unethical.

In short, unless you meet the conditions mentioned above (most people, including myself, do not), this is mainly a game of luck.

Nevertheless, we need to change the stereotypes surrounding cryptocurrency. Meme tokens are almost impossible to make you rich overnight. If you really care about this field, then go learn and develop a real investment strategy.

Expecting a 10,000-fold return within a few hours is unrealistic. A reasonable expectation is to achieve a 2-4 times return over 2-5 years. Understanding this may allow you to truly profit (of course, this is not investment advice). Don't be misled by short-term Meme trends.

Will meme tokens disappear? No.

Have they reached the peak of their madness? Possibly, and it is likely to continue.

But if you want to succeed in this complex world of cryptocurrencies, you need to be well prepared and have a deep understanding of the projects you are investing in.