Why are more and more retail investors afraid to enter crypto now?

Because in the past few years, this industry has almost tested every pitfall that ordinary people could step into.
The FTX collapse told everyone: even the world's top exchanges can evaporate overnight. The so-called "safe, large platform with capital backing" can still blow up.
LUNA/UST showed us: high APY stablecoins are often not returns, but bait. 20% annual yield sounds attractive, but when it goes to zero, there's no exit button.
Later, various cross-chain bridges being hacked made many realize: on-chain assets are not inherently safe. A vulnerability or a private key leak can wipe out hundreds of millions of dollars instantly.
Then came wallet phishing.
People originally thought "Not your keys, not your coins" was the ultimate answer, but it turned out self-custody is just as dangerous. Clicking the wrong link or signing the wrong authorization can still drain your assets.
Next is VC tokens.
Low liquidity, high FDV, launching at a peak—retail investors are basically providing early investors with exit liquidity. Many projects haven't even developed a product yet, but their valuation skyrockets to billions of dollars.
What’s most damaging is actually the change in airdrop logic.
In the past, everyone thought that more interaction, testing, and contribution would always yield rewards. But more and more projects started anti-witch-hunting, and many genuine users were mistakenly penalized. In the end, it turns out that months of hard work are less profitable than running a few hundred machines in a studio.
So now, many retail investors’ mindsets have become:
Leaving exchanges, afraid of a blow-up;
Storing on-chain, afraid of theft;
Playing DeFi, afraid of going to zero;
Chasing new tokens, afraid of getting caught holding the bag;
Participating in airdrops, afraid of wasting effort for nothing.
The final result is that although the technology in the industry is becoming more complex, ordinary people are increasingly reluctant to participate.
And the most dangerous time in a market is not when no one is calling trades, but when ordinary people start to accept the mindset that "there are only scythes, no opportunities." #Gate广场五月交易分享