What is the difference between realized loss and unrealized loss in the context of cryptocurrency trading?

1 answers

• Mar 22, 2022 · 3 years ago
  In the context of cryptocurrency trading, realized loss and unrealized loss are two terms that are often used to describe the financial performance of your investments. Realized loss refers to the loss that you have actually incurred by selling a cryptocurrency at a lower price than what you bought it for. This loss is considered 'realized' because it has been actualized through the sale. On the other hand, unrealized loss refers to the decrease in value of a cryptocurrency that you still hold. It is called 'unrealized' because you haven't sold the cryptocurrency yet, so the loss is not realized. It's important to note that unrealized losses are not permanent and can change as the market fluctuates. It's also worth mentioning that both realized and unrealized losses are part of the overall risk and volatility of cryptocurrency trading.
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