5 ways to lose money trading Bitcoin

It is worth restraining and protecting yourself from such decisions in the wild cryptocurrency market. Investing in this market requires meaningful and in-depth analysis.

Table of contents

How can you lose money in Bitcoin?

Bitcoin isn’t generally considered a good and responsible investment, but we’ll tell you the ways how not to lose money trading Bitcoin and using Bitcoin Loans.

Remember these 5 rules to protect yourself:

1. Crypto is not a fast-track strategy

It is only natural that when a market is flying that many new investors are wanting to be part of it. When prices rally at parabolic rates there is a constant stream of people posting videos on the beach saying how well they have done. Do not believe them. If too many people believe that it is, rates will rise too much, and finally the bubble bursts.

2. Day trading is very difficult

The majority of сrypto traders found day trading; many attempted, some succeeded and some failed.You need to stick to the markets and reports, track patterns and use technological research for the production of skirts. Even, you will interrupt all your savings by rapidly changing the market. The trouble with trading in the day is that stocks can be irrational in the short run, things happen that are meaningless and you are fighting the human feelings of anxiety and covetousness.

3. Run the risk of a margin call


The golden maxim that you can not afford to lose is broken by the margin trading, even if you can afford to lose this, you can only make the original 10x investment yourselves. With margin trading, you are being greedy and borrowing to invest, and you, therefore, run the risk of a margin call. Crypto investing is now known to be incredibly speculative and extremely dangerous. Therefore, you put your capital at risk while you are selling on the margins.

Shorting means that you gamble on a value-added commodity, which is a valuable method for measuring feelings within markets. The key problem with сrypto shortening is that you shorten the very volatile market that is running for two years. You are dealing with the feeling of the industry. 

4. Short selling is only for the very experienced

The other problem in a bull market is that you are a day merchant since you must keep a close eye on stocks. And the day trading I do not suggest. It is a place for the inexperienced to lose money.

The latter is a consideration that stock market investors should not have to think about yet should be your main concern when entering сrypto. The items that make it possible for сrypto to share and invest are also easy to rob. There are hackers around the world seeking to hack сrypto machines and trade them.

5. You must take protection very seriously

A bunch or more of your money can be lost by a slip. You just need to browse Reddit to find horror stories about people who did not make a two-way authentication during an exchange, did a connection in a spam email, or visited and reported their information on a phishing website. Hackers would like to target you; they would like to rob your funds.

How not to lose money using Bitcoin loans? 

So, how will Bitcoin loans help not to lose money? Open any cryptocurrency price tracking service on the Bitcoin page. Think long-term about this currency. Looks tempting, doesn’t it? Despite small drops, which are normal for any asset, the price chart is steadily going up.

Taking a crypto loan is almost the same as hodling your crypto assets in your wallet without touching them. But only here you also earn interest. There is, of course, a set of general rules that work not only with Bitcoin.

Bitcoin Loans at CoinRabbit

Here are the most important things you should know and/or constantly keep:

  • Liquidation price. You should be constantly aware of your collateral currency price swings. The ONLY way to lose your collateral completely is to let it reach its liquidation price;
  • We always send our clients multiple notifications if their collaterals are nearing liquidation prices. To avoid it either buy your collaterals back by repaying the loan amount + accumulated APR or deposit more funds in order to reduce the liquidation price;
  • Applied LTV rate is 50% which means your collateral price must decrease by 50% before the liquidation. (Loan-to-Value is a necessary part of crypto backed loan and defines what percentage of your collateral value you receive when getting a crypto-backed loan);
  • The best time to get crypto backed loans is when you are sure about the currency price going to grow in the future (no matter the time frame). One more tip is to get loans when you think its “a dip” already;
  • Throughout the years the crypto market grows from year to year. That’s why we suggest to choose long timeframes for your loans to increase potential returns and reduce the risks of being liquidated;
  • As all the financial activities take everything moderately.

You would also be unable to purchase a vehicle without first testing it. And without testing them, you certainly won’t buy a couple of sneakers. Likewise, make sure you appreciate what it is and how it functions before you buy Bitcoin. 

Many people claim Bitcoin is an excellent investment, especially in social media. But investing in something simply because someone else does is not a smart idea. A little homework helps you to escape scams, develop an investment portfolio and decide when to buy and sell.

How can you lose money in Bitcoin?

The value of Bitcoin increases naturally and wants to participate. But over the last decade, Bitcoin has seen rapid growth and declines. Imagine your work losses that week – you’ll be happy to stock up your emergency fund to pay off loans before investment. Before you invest, you’ll have to dive. 

The crypto bandwagon can be won a lot and minimizing certain errors can help you reduce those risks.

There are plenty of coins to choose from if you want to change items within your crypto portfolio. But just like Bitcoin itself, before you buy science. Look for existing coins behind them with well-known names. You should read any single coin on a white paper and see what the coin is going to do and who’s interested. Another way that fraudsters cheat people out of their money is by bogus coins.

How to loan Bitcoin? It will help you use it as a strategy for earn or saving

You can read a full description of the work of our service with screenshots here.

Conclusion

Don’t get dragged into crypto as a fast scheme get rich. It is a high-risk, high-profit business prospect. Make sure you’re sure that it’s for you and don’t be selfish if you spend and take your time.

Ways to lose money trading Bitcoin