Here’s something that never happened…
“Grandpapa, Grandpapa,” little Timmy shouted as he tugged at his grandfather’s pant leg, trying to get his attention. “Tell me the story, again, about how you built generational wealth during the alt-coin bull market of 2025.”
“Oh Timmy,” Grandpa Rockefeller replied humbly, “I’ll tell you the story one more time. But then, you have to go outside and play. After all, the whole point of having great wealth is so my grandchildren can lead lives of leisure.”
“Yes Grandpapa,” Timmy pleaded, “I promise I’ll play. Now please tell the story. Pleeeeease.”
“Okay,” Grandpa said, “it was late-September, or maybe early October of 2025. All of my friends had been placing bets in the cryptocurrency market. And, they were cleaning up. President Trump was the most “pro-crypto” president ever. So everything crypto-related, or even crypto-adjacent, was going up.”
“To the moooooon!” little Timmy shouted.
“That’s right, Cielo.” Grandpa Rockefeller agreed. “To the moon.”
“So, despite your grandmother telling me that just because my friends are doing something doesn’t mean I have to do it too, I took all the money Grandma and I had saved up over the years and put it in something called Fartcoin, at 10 times leverage.”
“What is Fartcoin?” Timmy asked.
“I have no idea.” Grandpa replied.
“What is leverage?” Timmy also asked.
“I have no idea.” Grandpa also replied.
“All I know,” Grandpa Rockefeller continued, “is that investment made me more money than we can ever spend in 10 lifetimes. The end.”
“The end,” Timmy repeated as he ran outside pumping his arms in the air and chanting, “Fartcoin, Fartcoin, Fartcoin.”
Like I said… this never happened.
Instead, as anyone browsing through comments in any of the financial chatrooms over the weekend discovered, the alt-coin market melted down.
“I lost nine million dollars,” someone wrote. “Now I’m broke and I don’t know what I’ll do.”
The person went on to tell how he started with a $1,000,000 investment, used leverage to create a $12 million position. And, when Fartcoin dropped 50% on Friday night, his position was liquidated automatically to meet the margin call.
All his money was gone.
Of course, I have no way of knowing whether this person’s story is true or not. But, the chatrooms are filled with so many postings of similar stories I do know there was a tremendous amount of pain inflicted on the crypto market over the weekend.
Some news outlets reported that $19 billion was wiped out. Other reports suggest the total damage could be five times that amount.
And it’s all because folks took their eyes off the “risk” part of the “risk/reward” equation.
Folks who buy investments they don’t understand, or investments with no utility are focusing only on the potential reward. Folks who borrow money to speculate are focusing only on the reward.
They’re not paying attention to the risk – which is arguably the most important part of that equation.
Of course, it’s understandable to want to join the party when everyone else is having a good time. We want to hang out with the hot roller at the craps table. Everybody wants to tell the story of how they made their fortune in the market.
But, the main plot of that story isn’t about maximizing the gains. The gains, after all, will take care of themselves.
The main plot is to minimize the losses.
Often times, during raging bull markets
Best regards and good trading,
Jeff Clark
Editor, Market Minute
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