Risk Warning
Last Updated: March 26, 2026
CRITICAL RISK WARNING:
Trading digital assets involves significant risk. You may lose your entire investment and, in some cases, more than your initial deposit. Only trade with funds you can afford to lose.
Digital assets are highly speculative, extremely volatile, and not suitable for all investors. Before trading, carefully consider your investment objectives, experience level, and risk tolerance.
1. General Risk Warning
1.1 High-Risk Investment: Digital assets represent a high-risk investment that may not be suitable for all users. The value of digital assets can fluctuate dramatically, sometimes within minutes or hours, and there is no guarantee that you will recover your investment.
1.2 Suitability Assessment: Before engaging in digital asset trading on Bit1, you must honestly assess:
Your financial situation and ability to sustain losses
Your experience with volatile financial instruments
Your investment objectives and risk tolerance
Your understanding of digital assets and trading mechanics
1.3 Financial Loss: You should only trade with funds that you can afford to lose completely without affecting your financial security or lifestyle. Never use borrowed money, emergency funds, retirement savings, or money needed for essential expenses.
1.4 No Investment Advice: Bit1 does not provide investment advice, financial advice, or recommendations. All trading decisions are entirely your own responsibility based on your independent analysis and judgment.
1.5 Regulatory Status: Digital assets may not be regulated in the same manner as traditional financial instruments. They may not be covered by investor protection schemes or deposit insurance programs.
2. Market Volatility Risk
2.1 Extreme Price Fluctuations: Digital asset prices are subject to extreme volatility and can experience dramatic price movements within short periods. It is not uncommon for digital assets to gain or lose 20% or more of their value in a single day.
2.2 Contributing Factors: Market volatility can be influenced by numerous unpredictable factors including:
Market sentiment and investor psychology
Regulatory announcements or changes in government policy
Technological developments or network upgrades
Macroeconomic conditions and global financial markets
Large trader activity and institutional movements
Social media trends and public perception
Media coverage and news events
Low liquidity periods during off-peak hours
2.3 No Trading Halts: Unlike traditional stock exchanges, digital asset markets operate 24 hours a day, 7 days a week, with no circuit breakers or trading halts during extreme volatility. This means positions can continue to move against you even when traditional markets are closed.
2.4 Gap Risk: Digital assets can experience significant price gaps between closing and opening prices, especially during weekends or periods of low liquidity, which may result in substantial unexpected losses.
VOLATILITY WARNING: Digital asset prices can move against your position rapidly and substantially. Losses can accumulate quickly, especially with leveraged positions.
3. Leverage and Margin Risk
3.1 Leverage Amplification: Leverage amplifies both potential gains and potential losses. While leverage can magnify profits when trades move in your favor, it equally magnifies losses when trades move against you.
3.2 Total Loss Risk: When trading with leverage, you risk losing your entire margin deposit. In extreme market conditions, losses may exceed your initial deposit, potentially resulting in a negative account balance.
3.3 Forced Liquidation: Positions may be automatically liquidated when your account equity falls below the required maintenance margin level. Liquidation occurs at prevailing market prices, which may be significantly worse than expected due to:
Market volatility and rapid price movements
Low liquidity or wide bid-ask spreads
Slippage during execution
Network congestion or technical delays
3.4 No Margin Calls: Bit1 does not provide margin calls or warnings before liquidation. It is your sole responsibility to monitor your positions and maintain adequate margin at all times. Positions can be liquidated without prior notice.
3.5 Funding Rate Costs: For perpetual futures contracts, you may be required to pay or receive funding payments at regular intervals. These costs can erode the value of your position over time, especially during periods of high funding rates.
3.6 Margin Requirement Changes: Margin requirements may be increased at any time without advance notice, especially during periods of high volatility or market stress. This could result in forced liquidation of existing positions.
3.7 Cascade Liquidations: During periods of extreme market stress, large-scale liquidations can trigger further price movements and additional liquidations, potentially resulting in losses that exceed deposited margin.
LEVERAGE WARNING: Leveraged trading can result in rapid and substantial losses. You may lose more than your initial deposit. Only use leverage if you fully understand the risks and can afford total loss.
4. Liquidity Risk
4.1 Reduced Liquidity: During periods of market stress or volatility, liquidity may become severely reduced, making it difficult or impossible to execute trades at expected prices.
4.2 Slippage Risk: Large orders or orders during low-liquidity periods may experience significant slippage, where the actual execution price differs substantially from the displayed market price.
4.3 Asset-Specific Liquidity: Certain digital assets may have limited trading volume, making it difficult to buy or sell positions without significantly impacting the market price.
4.4 Withdrawal Delays: During periods of high network congestion or increased demand, withdrawals may be delayed or suspended temporarily, preventing you from accessing your funds when needed.
4.5 Order Book Gaps: In thin markets, there may be significant gaps between bid and ask prices, resulting in poor execution prices for market orders.
5. Technology and Platform Risk
5.1 Platform Availability: Trading platforms are subject to technical failures, system outages, network congestion, power failures, and other technical issues that may prevent you from accessing your account or executing trades.
5.2 Software Risks: Platform software may contain bugs, errors, or vulnerabilities that could result in:
Incorrect order execution or pricing
Loss of data or funds
Unauthorized access to accounts
System malfunctions during critical trading periods
5.3 Internet Connectivity: Your ability to trade depends on your internet connection. Connection failures, network latency, or service interruptions may prevent you from managing your positions, potentially resulting in significant losses.
5.4 API Failures: If you use automated trading systems or APIs, technical failures in these systems may result in unintended trades, missed opportunities, or inability to close positions.
5.5 Security Breaches: Despite security measures, trading platforms remain vulnerable to cyber attacks, hacking attempts, and security breaches that could compromise your account or personal information.
5.6 No Warranties: The Bit1 platform is provided "as is" without warranties of any kind. We do not guarantee continuous, uninterrupted access to our services.
6. Regulatory and Legal Risk
6.1 Changing Regulations: Digital asset regulations are rapidly evolving and vary significantly between jurisdictions. Changes in laws or regulations may:
Restrict or prohibit the trading of certain digital assets
Impose additional compliance requirements
Result in the delisting of assets from trading platforms
Affect the legal status of existing positions
6.2 Account Restrictions: Regulatory changes may result in restrictions on your account, including:
Suspension of trading privileges
Forced closure of positions
Restrictions on deposits or withdrawals
Requirements for additional documentation
6.3 Tax Obligations: Digital asset trading may have complex tax implications that vary by jurisdiction. You are solely responsible for understanding and complying with all applicable tax obligations, including:
Capital gains and losses reporting
Income tax on trading profits
Transaction reporting requirements
Compliance with local tax authorities
6.4 Cross-Border Issues: Digital asset trading across borders may involve additional regulatory complexity and potential conflicts between different legal systems.
7. Counterparty Risk
7.1 Counterparty Default: In any trading arrangement, there is a risk that the counterparty may be unable or unwilling to fulfill their obligations, potentially resulting in financial loss.
7.2 Exchange-Specific Risks: Trading on digital asset exchanges involves risks specific to the exchange operator, including:
Business failure or insolvency
Mismanagement of client funds
Fraud or criminal activity
Regulatory action against the exchange
Technical failures or security breaches
7.3 Custodial Risk: When you deposit digital assets with an exchange, you rely on the exchange's security measures and business practices to safeguard your funds. There is always a risk of loss due to theft, mismanagement, or business failure.
8. Digital Asset Specific Risks
8.1 Blockchain Network Risks:
Network Forks: Blockchain networks may undergo forks that could affect asset value or accessibility
Protocol Changes: Updates to blockchain protocols may impact digital asset functionality
Network Attacks: Digital assets may be vulnerable to 51% attacks or other network-based attacks
Consensus Failures: Disagreements within the network community may lead to instability
8.2 Smart Contract Vulnerabilities: Digital assets based on smart contracts may contain programming errors, security vulnerabilities, or design flaws that could result in total loss of value.
8.3 Token Delistings: Digital assets may be delisted from trading platforms due to regulatory concerns, technical issues, or insufficient trading volume, potentially making them illiquid or worthless.
8.4 Irreversible Transactions: Digital asset transactions are typically irreversible. Sending funds to an incorrect address or falling victim to fraud may result in permanent loss with no possibility of recovery.
8.5 Private Key Security: If you maintain control of private keys for digital assets, loss or theft of these keys may result in permanent loss of access to your funds.
8.6 Network Congestion: High transaction volumes on blockchain networks may result in delayed confirmations, higher fees, or failed transactions.
9. No Guarantee of Returns
9.1 Past Performance: Past performance of any digital asset does not guarantee future results. Historical price data should not be used as the sole basis for investment decisions.
9.2 No Profit Guarantee: No trading strategy, analysis method, or market indicator guarantees profits. Even sophisticated trading algorithms and professional strategies can result in substantial losses.
9.3 Information Limitations: Information available on the Bit1 platform is provided for informational purposes only and should not be construed as investment advice, financial advice, or trading recommendations.
9.4 Market Unpredictability: Digital asset markets are inherently unpredictable, and even experienced traders and investment professionals regularly experience significant losses.
10. Your Responsibilities
10.1 Due Diligence: You are solely responsible for conducting your own research and due diligence before making any trading decisions. This includes understanding:
The technology underlying digital assets you trade
Market conditions and trends
Regulatory environment in your jurisdiction
Tax implications of your trading activities
10.2 Risk Management: You must implement appropriate risk management strategies, including:
Position sizing based on your risk tolerance
Setting stop-loss orders to limit potential losses
Diversifying your investments across different assets
Regular monitoring of your positions and market conditions
10.3 Financial Planning: Only trade with funds you can afford to lose completely. Never risk money needed for essential expenses, retirement, or emergency situations.
10.4 Education: Ensure you fully understand the trading instruments you use, especially complex products like leveraged futures contracts, before risking real money.
10.5 Professional Advice: Consider consulting qualified financial advisors, tax professionals, or legal counsel regarding your trading activities, especially for large positions or complex strategies.
10.6 Monitoring: Actively monitor your positions, margin levels, and market conditions. Do not rely on automated systems or assume positions will remain stable without oversight.
11. Acknowledgement and Acceptance
11.1 Risk Acknowledgement: By using Bit1's services, you explicitly acknowledge that you:
Have read and understood this Risk Warning in its entirety
Understand the risks associated with digital asset trading
Accept full responsibility for any losses incurred
Will not hold Bit1 responsible for trading losses or market movements
11.2 Financial Capacity: You confirm that:
You are trading only with funds you can afford to lose
Your trading activities will not jeopardize your financial security
You have adequate financial resources to bear the risks of loss
11.3 Understanding of Products: You represent that you fully understand:
The nature and risks of spot trading and perpetual futures
How leverage and margin requirements work
The potential for total loss of invested capital
The absence of investor protections available in regulated markets
11.4 Independent Decision: You acknowledge that all trading decisions are made independently based on your own analysis and judgment, without reliance on advice or recommendations from Bit1.
FINAL WARNING: Digital asset trading involves substantial risk of loss. You may lose some or all of your invested capital. Only trade if you fully understand and accept these risks.
Contact Information
For questions about this Risk Warning or trading risks:
This Risk Warning is effective as of March 26, 2026 and forms an integral part of your agreement with Bit1 Ventures.
Last updated
Was this helpful?