Why Do Most Meme Coin Investors Struggle to Make Profits?

A few weeks ago, I wrote an article discussing the importance of adhering to investment principles. However, the current market conditions seem to indicate that many investors have not developed clear investment strategies, and what is even more concerning is that most are experiencing losses. For newcomers who are experiencing the cryptocurrency cycle for the first time, this field is indeed full of challenges. It is easy to incur losses if one tries to go against the dominant forces in the market. Recently popular tokens like $TRUMP, $LIBRA, $JAILSTOOL, and $CAR are typical examples. These are merely surface phenomena; those who delve deeper into the market know that the issues are far more complex than they appear on the surface.

I must emphasize again: if you view the cryptocurrency market as a casino, then it will also view you as a gambler.

In traditional casinos, about one in five players can profit from slot machines. This means that the vast majority of participants are losing. Even the so-called "winners," if you calculate their investments before winning, it is actually difficult to consider them truly profitable. Suppose you frequently invest in various meme coins, and after repeated losses, you finally achieve a big gain. What happens then? You might think you've found the secret to wealth. But in reality, this kind of accidental success is often the exception, and if you continue to operate this way, the market will eventually lead you to losses.

Casinos attract customers by offering free food and the illusion of financial freedom. Similarly, Meme coin projects entice investors with airdrops, astronomical promises of returns, and a luxurious lifestyle.

Casinos set rules that keep you participating until they decide to end the game. Social media influencers are similar; they hype a certain meme coin to its peak and then quickly abandon it.

When you're not lucky, the casino encourages you to keep trying, promising the possibility of "getting rich overnight." A similar phenomenon exists in the Meme coin market, but the probability of success is even lower.

Explaining the reasons for losses from a mathematical perspective

As a math enthusiast, I want to explain the law of large numbers in a simple and easy-to-understand way.

This law indicates that as the number of trials increases, the results will get closer to the expected average value. In gambling, the expected average value usually implies a loss. Casinos and various gambling games are designed based on this principle. The more times one participates, the more individual results tend to approach the casino's advantage.

This can be understood as follows: if you flip a coin 10 times, you might get 7 heads and 3 tails — anomalies can easily occur in a small sample. However, if you flip it 1000 times, the result will be much closer to a 50/50 ratio. The same logic applies to investing in meme coins. You may have good luck in one or two trades, but after enough trades, the expected outcome will revert to reality. And the reality often is that social media influencers are getting richer, while ordinary investors are shouldering massive losses.

So, how do a few winners achieve victory?

1. Early entry - However, we must admit that even the smartest people find it difficult to accurately grasp the timing of exit, and early entry is nearly impossible.

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

3. Becoming an opinion leader to manipulate the market - equally unethical.

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

Nonetheless, the negative image of the cryptocurrency industry needs to change. Meme coins are almost impossible to make you rich overnight. If you really care about this field, you should go learn and develop a reasonable investment philosophy - a truly viable philosophy.

Gaining ten thousand times the profit within a few hours is an unrealistic idea. Expecting to achieve 2-4 times the profit within 2-5 years is a rational expectation. If you can understand this, you have the opportunity to profit in this market (. Of course, this does not constitute investment advice ). Don't be deceived by the short-term meme coin craze.

Will Meme coin disappear? No.

Is it currently a period of high crime incidence? Yes, and this situation may continue for some time.

But if you want to succeed in this uncertain world of cryptocurrency, you need to be well prepared and truly understand the projects you are investing in.