People lose money in crypto for several reasons, often due to lack of knowledge, poor risk management, or emotional trading. Here are the main reasons:

1. Lack of Knowledge & Research

• Investing in hype without understanding the project

• Falling for scams, rug pulls, or Ponzi schemes

• Not knowing how to use exchanges or wallets properly

2. Poor Risk Management

• Investing more than they can afford to lose

• Not setting stop-loss orders

• Overleveraging in futures trading

3. Emotional Trading

• Panic selling during dips

• FOMO (Fear of Missing Out) buying at the top

• Impulsive trading without a clear strategy

4. Security Mistakes

• Losing private keys or seed phrases

• Getting hacked due to weak security

• Falling for phishing scams

5. Market Volatility & Manipulation

• Whales manipulating prices (pump and dump schemes)

• Flash crashes liquidating leveraged positions

• Unexpected news impacting market sentiment

6. Regulatory & Exchange Risks

• Sudden bans or restrictions in certain countries

• Exchanges collapsing (e.g., FTX)

• Withdrawal issues due to liquidity problems

7. Holding the Wrong Coins

• Investing in dead or low-liquidity coins

• Chasing meme coins with no real utility

• Not diversifying enough