𝗜𝗡𝗩𝗘𝗦𝗧 𝗪𝗛𝗔𝗧 𝗬𝗢𝗨 𝗖𝗔𝗡 𝗔𝗙𝗙𝗢𝗥𝗗 𝗧𝗢 𝗟𝗢𝗦𝗘, 𝗪𝗛𝗔𝗧 𝗘𝗫𝗔𝗖𝗧𝗟𝗬 𝗗𝗢𝗘𝗦 𝗧𝗛𝗔𝗧 𝗠𝗘𝗔𝗡?
Many new traders get frightened sometimes when they hear this statement. some will feel like, does that means we must loose it all ?😲
Let me explain: It doesn't necessarily means you will loose all, but you have to prepare for eventuality right? hehehe.
Invest what you can afford to lose in crypto means only risking money that will not affect your daily life, essential expenses or long-term financial security if it disappears completely. 😲Just in case !!
Because cryptocurrencies are highly volatile, as a result of this, the rule of "INVEST WHAT YOU CAN AFFORD TO LOSE" ensures investors avoid panic selling during market downturns, protecting their mental health and financial stability.
KEY IMPLICATIONS OF THIS RULE- Why it matters ?
✓VOLATILY RISK: Cryptocurrencies can experience massive, rapid price drops to zero or near-zero.
✓EMERGENCY FUND PROTECTION: Never use money needed for rent, food, or emergency savings to buy crypto.
✓LIMITING EXPOSURE: Experts recommend making crypto only a small percentage (e.g, 1%– 5%) of your overall investment portfolio to limit risk.
✓RISK MANAGEMENT: This approach acts as a buffer, preventing a potential total loss of the invested capital from causing financial ruin.
In a nut shell, this, in essence, is a risk management strategy designed to protect investors in an unpredictable, high-risk market.
DYOR always to make informed investment decisions.
#RiskAssetsMarketShock #JPMorganSaysBTCOverGold
