When you start investing in crypto we’re legally obliged to insure that you’re an experienced investor. If you’ve been having trouble passing our knowledge test, here are some useful facts that should help. 

What is true for fractional coins?

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• You won’t be an owner of a coin and won’t get a wallet.
• You won’t trade directly at exchange
• Instead, CM-Equity as a counterparty for your each trade will provide you with the best market prices available at top exchanges

Why is this true? Fractional coins are a way for you to invest in cryptocurrencies without having to own the currency itself. That frees you from having to set up a wallet, while giving you the same exposure you would get if you owned it. If you want to know more, read our blog post here. 

What can affect the price of a fractional coin?

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• Change in the price of cryptocurrency on the market
• CM-Equity becomes bankrupt 

Why is this true? The first one is obvious — if the price of the cryptocurrency changes, so does your fractional coin. That’s the whole reason you’re invested! The second one may sound scary, but it’s not — if your broker goes bankrupt, they might not be able to pay out your investment to you. This is not a regular occurrence, especially in Germany, but we want to make sure you have all the facts before you invest. 

What is the maximum loss of the price of a fractional coin?

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• 100%. As well as the price may go up, it may indeed go down. You’ll never lose more than you invested.

Why is this true? Let’s think about it for a moment. If the price of a fractional coin goes up 10%, so does your investment. If it goes down 10%, same for your invested money. So what’s the largest theoretical amount a coin could sink? Well, it could go down to 0. That would be a 100% loss. It’s not a highly likely scenario, but it is possible. Thankfully, it can’t go down any further. 

What kind of experience do you need to have to invest in factional coins?

• To open a pocket you need to have theoretical knowledge at least in cryptocurrencies. If you want to get some knowledge, read our blog post here. 
• It’s a big plus to have some experience in any of listed types of investment