Despite people saying cryptocurrency is about to explode, Bitcoin (BTC 2.40%), Ethereum (ETH 0.04%), Dogecoin (DOGE 4.05%), and many other altcoins are attracting new investors all the time. Like any investment, there is a risk of loss when investing in cryptocurrencies. But betting on the wrong one isn't the only way to make everything go wrong. Here's a look at four ways investing in cryptocurrency could cost you and how you can reduce that risk.
You can compare Bitcoin with a stock, right now the price of 1BTC is 11k if the price goes down you will have the same 1BTC, but for example it will be worth less because it went down, if the price of BTC grows, you will still have 1BTC but it will be worth more. Do you know how I can buy bitcoin today using Coinbase? With my bank account added, it says I have to wait until February 1 until it is deposited. Is this normal or does anyone know how to avoid the wait so I can start trading today? Your bank account should not be linked to your bitcoin wallet. You can only lose what you invest.
Your money in the bank is completely separate. A lot of people buy bitcoins on credit. Investors who use cash accounts cannot lose more than they invest in stocks, although they can lose their entire investment. The price of a share may drop to zero, but you would never lose more than you invested.
Although losing your entire investment is painful, your obligation ends there. You won't owe money if the value of a stock decreases. For these reasons, cash accounts are probably your best option as a beginner investor. Unfortunately, it's easy to lose more money than you invest when you're shorting stocks, or any other security, for that matter.
In fact, there is no limit to the amount of money you can lose on a short sale (in theory). Like any investment, making money depends on the price at which you buy and sell an asset. If you sell when its price is higher than the one you bought it, you will make money. Unfortunately, individual traders can't do much about these vulnerabilities, but cryptocurrency platforms continue to develop new ways to keep investors' cryptocurrencies safe.