The content of Trading Academy is educational and is not investment advice. These are the most important risks you should know before you put any money into crypto.
You can lose everything#
Crypto prices are extremely volatile. Drops of tens of percent within a few days are not unusual, and many projects disappear completely – their tokens are then worth nothing. Only invest money you can afford to lose. Never invest money you need to live on, and never invest on credit.
Leverage and derivatives#
Trading with leverage (CFDs, futures, margin trading) magnifies both profits and losses. You can lose your whole deposit within minutes. According to analyses the EU's ESMA cited in 2018, 74–89% of retail investor accounts lose money trading CFDs.
No protection like at a bank#
Crypto-assets are not covered by deposit insurance like money in a bank. The EU's MiCA regulation sets requirements for crypto-asset service providers, but it does not protect you from falling prices. An exchange can go bankrupt or be hacked – and the money on it can be frozen or disappear. Outside the EU, different and often weaker rules apply.
Transactions cannot be reversed#
Nobody can cancel a payment on a blockchain. A typo in an address, a lost seed phrase or a scam means the money is gone. Scammers often pose as exchanges, celebrities or "investment advisers" and promise a sure profit – such a promise is always a warning sign.
Taxes#
Profits from crypto can be taxable. The rules differ by country and change over time. You are responsible for paying the right taxes – if in doubt, ask a tax adviser.
The past does not guarantee the future#
The charts and examples in the lessons show what happened in the past. None of it guarantees how the price will move next.
Summary
Crypto is highly risky. Only invest what you can afford to lose, do not use leverage and do not trust anyone who promises a sure profit.