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1/People don't understand the concept that trading/investing is a zero-sum game. It's a cliche that doesn't penetrate. If you want to be a successful trader/investor, that means you have to become someone who takes money from people. The profit you make comes from the losses of
2/others. It seems at times everyone is making money, but that's only temporary in penny stock situations (#cryptos)--the new money that came towards the top in $BTC went into the accounts of the people who got in earlier & then sold. The money Charlie Lee made selling $LTC in
3/Dec 2017 came from the accounts of those who came in after him. This is why when you read $BTC things like "we're all in this together," etc, it's just totally contrary to any real understanding of how markets work. You'd be dependent on new money continuously coming in, which
4/amounts to, "I hope new people keep coming in, so I can take their money from them." Whatever money you made, you took from someone else. Whatever you lost was taken by someone else. People are very disconnected from this reality, & their thought processes end up distorted.
5/And so you grasp how much of an illusion it is that even for a while, everyone in crypto got rich together, keep in mind that at the end of 2017, that "richness" was unsold longs. If they all tried to book their profits by selling, the market would collapse before most would be
6/able to, which is what happened. It was only ever possible for a tiny minority to realize the profit most thought they had. Unrealized profit is an illusion in that sense. The more people HODL, the bigger everyone's unrealized profits & the more they're misled that they can all
7/be in it together (other than losing together). All people who thought they got rich & lost it all HODLing were never rich together--only a few could have ever realized those gains. This is why the view that $BTC is ~ a lotto ticket where the public at large can win is a mirage
8/& is also why HODLing as a widely accepted investing philosophy sets up conditions for massive unrealized profits in the majority of HODLing accounts, that most can never realize--those who take it 1st take it from all the others, & only a few can take before most of it's gone.
9/Unrealized profit is like a pile of $ in the middle of a table. As new people come & add their $, the pile gets bigger & each thinks that one pile is his. The 1st few who sell take w both arms. All else are left w whatever's left--less than what they put in; this was ~Dec 2017.
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