Why is it that retail gets shaken out with every major price correction if crypto just keeps going up and up over time?

Why is it that, every time the market experiences one of those sharp, unexpected corrections, it’s always the retail investors, the ones who have carefully saved and taken calculated risks, who end up selling at a loss? It seems to be a pattern, one that’s so familiar it almost feels inevitable. You’d think people would learn from past cycles, especially considering the way the market tends to correct itself over time. But no, it’s like clockwork. When the market turns south, it’s the individual investors, the retail traders, who are the first ones to panic. They sell, lock in their losses, and then watch in frustration as the market eventually rebounds, often much higher than it was before the crash.

Is it that they don’t fully understand the nature of markets—that they’re cyclical, that volatility is just part of the landscape, and that corrections, while uncomfortable, are really just an opportunity in disguise? Or is it something deeper, something psychological? Maybe it’s that the average person is simply wired to react to uncertainty in a certain way—maybe we all feel that instinctual urge to protect ourselves when things start to slip away, even when the facts don’t warrant such a drastic reaction. Because, let’s face it, watching your investments take a dive, especially if you’ve put in a significant portion of your savings, is a terrifying experience. The numbers on the screen feel very real. It feels like losing something tangible, not just digits that can be replaced.

But the strange thing is, we’ve seen this story before. We’ve seen it in 2008, we’ve seen it in 2020, and countless other times throughout history. Yet, every time, individual investors seem to fall into the same traps. They buy in when the market is soaring, drawn in by optimism and the fear of missing out on the next big thing. The hype is contagious, and the more they hear about others making money, the more they feel they need to jump in. But by the time they do, the market has already started to turn. Prices are high, and the risk is already much greater than they realize. Then, when the inevitable correction hits, it feels like a gut punch.

What’s more puzzling is that even when the pattern is so clearly laid out—markets go up, they correct, and then they go up again—the retail investor still can’t seem to weather the storm. It’s almost like they expect something different to happen, as though the rules of the game have somehow changed. Maybe that’s the problem: they don’t truly understand the game. They see markets as a kind of lottery, with the potential for big wins in a short period of time. But that’s not how markets work. The big players, the institutions, the ones who’ve seen this cycle time and time again, know that downturns are simply part of the process. They understand that the real gains come over the long term, that staying in the game and riding out the volatility is the key to success.

But why does the emotional reaction to these corrections seem so much stronger for the individual investor? Is it because they don’t have the same resources or the same emotional distance from their investments? Institutional investors often have entire teams of experts guiding their decisions, helping them stay focused on the long-term horizon. Individual investors, on the other hand, are often making decisions in isolation, with very little support or guidance. And in an environment where the media plays a huge role, it’s easy to see how panic can set in. After all, when you hear about the market crashing, when you see those headlines, it’s hard not to feel like you’re about to lose everything.

Yet, for every person who panics and sells during a downturn, there’s another person, usually with more experience and a longer-term outlook, who is quietly buying. For every seller, there’s a buyer. And who are these buyers? They’re the big institutions, the players who are able to take advantage of these corrections because they’ve seen it all before. They know that downturns are temporary, and they’re willing to wait for the inevitable rebound. So, why is it that individual investors can’t seem to see that same opportunity? What’s missing from the way they approach these market corrections?

Maybe part of it comes down to experience. The more you’ve been through market cycles, the easier it is to take a step back and recognize the larger trends at play. You know that the market doesn’t go up in a straight line—it’s always going to have ups and downs. But if you’re new to the game, and you’ve never been through a serious correction before, it’s easy to fall prey to the emotional highs and lows. You might feel like you’re missing out when the market is rising, and when it drops, it feels like you’re watching all your hard work go down the drain.

And then there’s the issue of leverage. Many individual investors get involved with borrowed money—whether it’s through margin trading or loans—which can amplify both gains and losses. When the market drops, these investors are often forced to sell to meet margin calls, adding additional selling pressure and further pushing prices down. But once again, the institutions are the ones who benefit. They have the capital to weather these drops, to buy when others are forced to sell, and to come out ahead in the long run.

So, is the problem simply a matter of knowledge or experience? Is it that individual investors just need to better understand how markets work, to learn that corrections are normal and even healthy for the long-term growth of an asset? Or is it more about managing emotions—about learning to control the fear that takes hold when the market turns against you? After all, the people who succeed in these markets aren’t the ones who buy at the highs and sell at the lows; they’re the ones who buy when others are afraid, when everyone else is selling, and who wait patiently for the market to correct itself.

It’s tough, though. When you’re staring at a 30% drop in your portfolio, it’s hard not to panic. You don’t have the luxury of hindsight. You don’t know for sure that the market will rebound, especially when it feels like the bottom could fall out. But this is where the big players have the advantage. They’ve seen it before. They know that these corrections are temporary, that markets always come back eventually. It’s not a matter of if—it’s a matter of when.

Now, I say all this, and I’ve been in the game long enough to have seen my fair share of market downturns. I can tell you from personal experience that the hardest part is when you’re in the middle of a correction, especially when it feels like the world is falling apart. And maybe that’s why I’m writing this now. As someone who’s lived through the ups and downs, someone who’s seen friends and family in Thailand and elsewhere struggle with the same emotions during market dips, I can’t help but wonder why the cycle seems so hard to break. It’s almost like we’re all caught in the same pattern, as though we can’t help but fall prey to the same fears.

But it doesn’t have to be this way. If we can step back, if we can see the long-term picture and learn to control our emotions, then maybe, just maybe, we can break free from this cycle of buying high and selling low. The key is to understand that corrections are a natural part of the process, and that staying calm, staying patient, and looking at the bigger picture is the way forward. After all, whether you’re in Thailand or anywhere else, the principles of investing don’t change. It’s all about timing, patience, and understanding that the market will always have its ups and downs. You just have to ride it out and be ready to buy when others are selling.