As a seasoned investor in the crypto world, I want to share some of the pitfalls I've stepped into—those seemingly high-yield but actually hidden-risk "opportunities."

**The Truth About High Annualized Returns: Essentially a Pump-and-Dump Game**

I still remember the craze of DeFi in 2021. I couldn't resist the temptation and jumped into the "liquidity mining" trap. The result? A bloody lesson.

I bought a project token at around $15, only to hold it until it dropped to about $7.8 before cutting losses. Now, that token is only worth $1.7, and the community discussion group I was in has long turned into a "losers' support group."

What seems like invincible high annualized returns is actually project teams using air tokens to exchange for your real money. The so-called "impermanent loss"? Basically, it's just a fancy name for a sharp drop in token price. Even more outrageous, many projects artificially create false prosperity through a cycle of mining and selling—once new funds dry up, the entire ecosystem spirals into death.

From my painful lessons, I’ve summarized two points: early participants might still get some gains, but latercomers are usually the last bagholders. Those truly earning passively? They've long been exploited by big institutions and professional arbitrage groups.

**The Tricks of Signal Providers: Creating Anxiety to Harvest**

This tuition is even more expensive—at least six figures.

I once followed a well-known analyst from a top platform. Counteracting his advice actually made me money, but following his thinking always got me caught. I later realized that the trick of free signal providers is quite simple: frequent trading → collecting fees → sharing profits with the platform and the analyst. The money you lose, they make in volume.

Even more disgusting is their psychological control tactics. Some analysts desperately hype "Bitcoin will drop to 11111," scaring people out of the entire bull cycle. Others use ambiguous language to leave a back door—if they profit, it’s because of their unique insight; if you lose, it’s because of your unstable mindset. No matter what, they win.

**My Investment Principle Is Simple**

Truly reliable traders never need to rely on guiding retail investors to make money; they quietly profit themselves. If you must follow someone, first look at their complete trading record over at least six months. Don’t be fooled by pretty screenshots of returns.