Cryptocurrencies first appeared on the market in January 2009, and even though they had a relatively slow start, now, 13 years later they are everywhere, and millions of people own them. Trading with cryptos is something that can be extremely profitable, but at the same time, it can be risky as well. Everyone can use them, purchase, and sell coins, but if you want to do more than just play with them for some small interest, you need to improve your skills and follow the trends and the market. During the pandemic, we witnessed an extreme crash on the crypto market, and even though almost every coin is back on the right track now, many people experienced serious losses. To avoid any serious dangers and mishaps, and to make sure you are trading them to the best of your abilities, you need to have as much information about the market as possible. Here, we are going to tell you what happens if a cryptocurrency goes negative, and how should you handle that to minimize your losses.
How can the value collapse?
The first thing we are going to talk about is what could lead to this. When we think of cryptos, we usually focus just on the biggest ones, such as Bitcoin, but since there are so many other ones that we may or may not know about, we need to understand that the market is not the same for every crypto.
There are several ways in which the value of the coin could collapse, and the easiest way to explain that is by supply and demand. When people are interested in something, they are going to invest in it, which means, they are going to raise its value. If they are not interested, and if they just don’t pay attention to something new, chances are, those things will never see the light of day.
The same would happen if everyone suddenly decided to stop mining and stop using one specific crypto. As long as there are active usage, supply, demand, and trading, a coin will continue existing, and potentially rising in value.
What would happen?
It is said that technically, a coin could not go negative, and could not even go to zero, but it could get really close to that, ergo, it will lose all its value. However, in some rare cases, this could happen, and in the shortest terms possible, it would mean that it will be delisted from every place where it was available for trading, and it would just stop existing.
You could not access your funds that were locked with it, and you would lose all of them. The trading volume of that currency will be able to reach zero, and even a negative point and that would mean that all the funds would be lost, and the crypto would not be available anywhere anymore. Note that peer-to-peer trading may still be an option even if all the trading places remove the coins, but this would not greatly affect the value and it would not help the currency to stay on the market.
As you can see if you click here, the place where you trade your coins makes a huge difference in the practice as well, and some services and platforms are far better than others. The best ones that you can collaborate with offer low fees, secured transactions, and constant support and information. When choosing the right platform for your needs, you need to look for a place that will give you information on the market as well, so that in case a coin is in danger to disappear or dropping in value, you should get aware of it and take action.
How to protect yourself?
Even though chances of large cryptos like BTC, ETH, LTC, and many others, to lose value are extremely low, this can happen to newer coins that are not that popular for users. This month, at the beginning of 2023 it was recorded that there are more than 8 thousand different coins on the market, and most users cannot name more than a dozen of them. This means that there are always those currencies that never see the light of day, they don’t get popular amongst traders, and they are just a bad investment.
The best way to protect yourself from losing money is to invest in something that has great potential. This can sound tricky, and you may think that only the huge and popular currencies are worthy and that you should not look at new things that were just placed on the market. This could not be further away from the truth, and you should not think that newer platforms are a strict no-no. You have to understand the market, see what the experts are predicting, and understand what you should invest in.
Some coins have extreme potential, and even though they may have a low value now, they can rise to thousands of dollars per just one crypto. Make sure you follow what the trends are, follow the stock market, and pay attention to what experts are saying.
Know that you should also pay attention to the platform that you are using for trading, and if you see that things are not going well, and if there is a chance for the crypto to go negative or zero, you should trade and sell it. Follow the masses and trust your experience, because, at the end of the day, the large masses of traders are those who change the value of the coins.
You should always research as much as possible, take your time to understand the coins that you are currently using and those that will rise in value over time. It is always best to rely on your knowledge, and not just on luck or gut feeling. Use a reputable platform that will give you all the notifications on current trends, and know that the most expensive cryptos are usually the most stable ones, so you should not worry when it comes to investing in them.