Cryptocurrency
Digital tokens whose ownership is recorded on a shared online ledger called a blockchain. They are not issued by any government and are not insured.
Crypto prices can swing sharply, even by the hour, and most coins have no company or earnings behind them. Crypto held on an exchange or app is not FDIC insured, and SIPC does not cover crypto that is not a registered security.
The IRS treats crypto as property. Selling it, trading it for another coin or buying something with it can create a capital gain or loss. The FTC warns that only scammers demand payment in crypto.
Example
Buy $500 of crypto and the price falls 70%: the loss is $500 × 70% = $350, leaving $500 − $350 = $150.