Is it possible to lose more than your investment with Crypto?

RiknMel

Hi All!
I'm thinking about making a small investment in Cryptocurrency (if only I'd bought Bitcoin when it was new, lol!) and I'm wondering if it's possible to lose more than my investment, and end up in debt. I know very little about this and haven't actually done anything yet. I wanted to get an unbiased opinion on the matter first without someone trying to sell me something, if you know what I mean. I do realise that investments can become worth less (or even worthless), but could my investment of say £50 become minus £50?
I really don't know much about this stuff (actually I know nothing at all) and I really appreciate your time.
Many Thanks!
Richard

MaxiRobriguez

No, your £50 investment could go to £0 but no lower.

If you borrowed to invest then yes you could end up in debt, but if this is just money from your wallet then no.

You may want to reconsider a Crypto investment however. It is very volatile and at peak prices - there is every chance your £50 could be worth £20 in a matter of weeks. Alternatively you could look at putting additional money into a tax efficient wrapper like a pension, where your money would immediately be worth £60, which you could then use to invest in more traditional, regulated markets.

zappahey

I've been watching this for a while and, while we might say invest, really it's just gambling as there's no intrinsic reason that the price should go up. It's really very volatile and you'll need to have a strong constitution.

[Deleted User]

RiknMel said:

Hi All!
I'm thinking about making a small investment in Cryptocurrency (if only I'd bought Bitcoin when it was new, lol!) and I'm wondering if it's possible to lose more than my investment, and end up in debt. I know very little about this and haven't actually done anything yet. I wanted to get an unbiased opinion on the matter first without someone trying to sell me something, if you know what I mean. I do realise that investments can become worth less (or even worthless), but could my investment of say £50 become minus £50?
I really don't know much about this stuff (actually I know nothing at all) and I really appreciate your time.
Many Thanks!
Richard

Bitcoin for tax reasons is just like any other investment, for example art, wine or vintage cars. You pay Capital Gains tax on it and report losses (if any) too. You can't loose more than you invested. Unless you loose your sanity in the process

originator

I bought in just before christmas, only 500 quid and to me its been a bit of fun watching it climb.I also took my original stake out after three weeks and whats left now is all profit......

RiknMel

Thanks everyone for taking the time to reply, I really appreciate it! Good luck all with your investments! CHEERS!

eskbanker

RiknMel said:

Is it possible to lose more than your investment with Crypto?

Based on the way most crypto threads go on here, you can also lose your sense of perspective....

moneysavinghero

Your saving of £50 could double to £100 in a few months. Then you think, wow this is great, im gonna stick another £5000 in now. Then in a few months that could be worth £1000. So yes you could lose more if you get carried away, but just investing £50 and no more = £50 is the max you can lose.

maxsteam

RiknMel said:

if only I'd bought Bitcoin when it was new, lol!

It makes a good news story but it's just hype, bitcoins have no intrinsic value. There are other things that you could invest in.

To answer your question, yes, you could lose more than £50.

There are derivatives where you start by putting £50 into the account, you take a position then, if prices move against you, you get a "margin call" and you must either deposit more funds or close the position.

There are also scams where you will simply not see your money again and you will be unable to contact the recipient of your £50. There are also scams where you put your £50 in and the provider simply makes up a story that you've been unlucky and you need to put more money in to cover the position. Another scam is where you get offered the chance to buy a bitcoin mine in a foreign country. There is considerably less regulation around bitcoin investing than you might think.

I can tell you something for certain though. If you walked into a pub (the chance would be fine) and told a stranger what you have written here, you would get a very plausible story with lots of fine-sounding promises from the stranger and plenty of genuine-sounding endorsements from the other drinkers but the stranger would simply want to make you £50 poorer. You need to know for certain that, wherever you send the £50, it is to someone more reputable than the stranger in the pub. You might be better going to a bookie and betting the £50 on something that you are more familiar with.

barnstar2077

I would rather play the lottery for a couple of months on my £50 than buy bitcoin, at least I have the chance of winning a million!

If you are interested in investing for your future, have you considered a stocks and shares ISA?

HehnryBlck

Richard, it's best to start with more investments, then there will be much more profit.