The Brutal Truth of Crypto Assets Trading! Retail Investors Become "Liquidity Export Internal" All Revealed

Crypto Assets trading is about faith; it is the purest financial instrument ever created, designed to draw hope from people's hearts and transform it into Liquidity. The Fluctuation of Crypto Assets does not stem from practicality, but from narrative, manipulation, and attention. This is not a market, but a psychological war. Most people are completely unaware that they are being hunted in this war. This article will reveal the truth of the price discovery cycle, the logic of Token extinction, and the insider's view of Liquidity exit.

The Brutal Cycle of Price Discovery: From 0 to 1 and Then to Oblivion

Regardless of the narrative, cryptocurrency trading follows the same price discovery cycle. At the beginning of the cycle, during the 0 to 1 phase, speculation dominates, and actual adoption is nearly zero, causing prices to soar based on sentiment. Communities form around an illusory future, and the volume of the narrative drowns out reality. This phase is the most deceptive, as the price increase creates the illusion of “early investors,” leading retail investors to mistakenly believe they have caught the next Bitcoin.

Then came the brutal pullback, eliminating those who were not steadfast holders and exposing those who bought in solely due to “promises.” The turning point appeared during these deep pullback periods. Projects with no actual demand quietly disappeared; they no longer tweeted, no longer developed, gradually fading away, while market liquidity flowed elsewhere. However, a few tokens managed to survive and enter stages 1 to 10. During this stage, speculation decreased, and adoption began to rise. These tokens would experience slow and tedious growth until genuine demand rekindled the second wave of trust. The second wave of trust would drive a long-term and strong upward trend. Only then could these tokens cross the cycle, but most tokens fail to reach this point.

The truth about cryptocurrency trading is that only less than 5% of projects can survive from stage 0 to stage 1. The remaining 95% will disappear during the first pullback, and retail investors often buy at the peak of stage 0 to stage 1, becoming the liquidity exit for venture capitalists and early investors.

The Hidden Truth: Most Projects Don't Actually Need Tokens

In the future, most projects will not require tokens. Once private companies can directly tokenize equity and raise liquidity on-chain, a large number of Crypto Assets will become useless. Certain aspects of DePIN and DeFi are the only categories that truly need tokens, as these tokens can guide the participation and coordination of various parties in the project. The others are merely funding methods disguised as innovation.

Most tokens exist because founders want to quickly raise funds, but that era is about to end, and better financing methods are on the way, along with impending regulation. However, meme coins and junk tokens will not disappear; they will proliferate because gambling is human nature. The difference is that the lines will soon be clear. When you are gambling, you can no longer use long-term investment as an excuse. You must make a choice: either you are gambling, or you are investing. Nowadays, everyone pretends to be an investor, even those chasing memes and hype believe the same.

The biggest self-deception in Crypto Assets trading is packaging speculation as investment. When a project has no value proposition other than the price of the Token rising, you are not investing; you are participating in a zero-sum game. The problem is that in a zero-sum game, retail investors are always the losers.

Psychological Traps: Cryptocurrency Trading is a Carefully Designed Manipulation

Crypto Assets are carefully designed, commitment-based data strings aimed at manipulating human behavior. The supply unlocking mechanism is intended to control hope, while the belonging plan gradually injects confidence into the market; the incentives are not just economic, they are emotional traps. The real product is not a Token, the real product is belief.

The narrative aims to target reactive thinking, which is driven by fear, anxiety, guilt, hunger, and desire. People do not buy Tokens; they buy the opportunity to escape the current reality. This is why the spread of Tokens surpasses logic, as beliefs spread faster than the truth. This is the reason for the existence of “pumps.” Venture capitalists enter early, market makers manipulate price trends, exchanges arrange listing times, opinion leaders amplify greed, whales quietly enter, and retail investors appear at the end of the chain as exit liquidity.

Five-layer harvesting chain of Crypto Assets trading:

First Layer: Venture capital enters the seed round at a very low valuation, and the holding cost may be only 1% of the listing price.

Second Layer: Market makers control price trends, creating technical patterns to attract retail investors.

Third Layer: Exchanges choose the timing of listing, usually at the peak of sentiment.

Fourth Layer: KOL amplifies the narrative, providing the final push for retail investors' FOMO.

Fifth Layer: Retail investors take over at the high point, providing exit liquidity for the previous four layers.

This is not a conspiracy; this is a process, this is the system. The essence of Crypto Assets trading is a liquidity game, and retail investors are always the liquidity providers, not the profit makers.

Liquidity Exit: You Are Always the Last to Know

If you don't know who you bought the tokens from, you are a “bag holder.” Token price discovery is a coordinated game controlled by insiders. Venture capitalists, exchanges, market makers, consortiums, whales, and KOLs collaborate tacitly. When retail investors see the tokens gaining popularity, insiders have already set the stage, waiting for liquidity.

The seed stage is the time to create the greatest wealth, but retail investors can never participate. Projects raise funds at undervalued levels, yet appear at a fully diluted valuation of billions when listed. Retail investors mistakenly believe they are entering early, but in reality, it is too late. They provide an exit opportunity for those who entered at lower levels.

The only way to survive in the Crypto Assets trading is to interpret market dynamics ahead of time, to enter the market before KOLs take turns promoting, and to layout before liquidity incentive measures are activated. If you buy in only after a YouTube influencer talks about it, then it's over. If you don't do your own research, then you're not investing; you're borrowing the beliefs of others. Borrowed beliefs will always be liquidated.

The Future Watershed: The Showdown Between Regulation and Anarchy

Crypto assets trading is splitting into two worlds: regulated crypto assets and an anarchic state of crypto assets. One will be controlled by the government, with compliant infrastructure, approved tokens, and comprehensive monitoring. The other is raw, brutal, and free, where privacy-focused chains will survive, the true spirit of decentralization will endure, and the real builders will take root.

Tokens were originally a countercultural phenomenon that has since faded away. Crypto assets have betrayed their mission and turned into Wall Street on the blockchain. But a cleansing is coming; demand for counterfeit tokens will vanish, purposeless projects will disappear, and narratives lacking substance will cease to exist. Only tokens anchored to actual adoption, real cash flow, or genuine purposes will survive, the rest will vanish.

You need to figure out why you are here. Because tokens are like mirrors, they will expose your greed, impatience, and fantasies. Most people come for freedom, but are trapped by speculation; most people come for wealth, but lose themselves due to greed; most people come for truth, but become addicted due to lies. This market will not save you, narratives will not save you, only self-discipline and vigilance can.

Survival Rules: How to Survive in Psychological Warfare

Crypto Assets trading does not reward followers; it only rewards those who can see the illusions. The masses always act slowly, always chase the hype, and always become the liquidity of others. Do not blindly follow the crowd; have your own trading logic, advantages, and patience. If you understand this game, you will not fear it, but rather take advantage of it.

The great cleansing will not destroy you; instead, it will help you find your position. The road ahead will not be easy; the market will test your faith, timing, patience, emotional control, and your ability to uphold the truth when the masses are drowned in noise. Now is not the time to pray for a bull market, but to strengthen your beliefs. There is only one question that remains to be answered: when the next cycle begins, will you enter early, or will you miss the opportunity again?

Survival is simple, learn the rules, act before others, and never become a liquidity outlet. Recognize yourself, and then enter the battle.