something that made me curious

[darkangel11]

If the A invests $1000 in bitcoin, then the next day the price of bitcoin drops dramatically and the A loses $1000, which makes me curious, where does the $1000 A money go?

HAHA I love this question, it's like primary school all over again
I know you shouldn't answer a question with a question, but let this be a riddle for you that will hopefully make you not only get the answer, but understand.

If you buy a used car for $1000 and try to sell it 2 years later with a higher mileage, will it be worth $1000? Probably not.
Now, if you put it on auction for $800, where does the $200 go?
I know that exchange may be looking suspicious to you, because it's not trading physical items, but the principle is the same.

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[jseverson]

Considering the board we're on, I'm going to go ahead and skip the condescension. The answer to this question is tied to one simple economic aspect: market value.

If you bought Bitcoin for $1000, from something/someone, they get your $1000 in fiat, and you get an asset that is worth $1000 in the market. You're not holding $1000, but something that can be sold in the market for $1000. If Bitcoin's market value drops to $0, you still have exactly what it is you paid for, except it's worth less in the market. Your $1000 didn't evaporate into thin air and is staying with the original seller.

It's the same principle if your Bitcoin appreciates. Let's say Bitcoin prices rise to $1200 the next day. You didn't magically gain $200 from nowhere, the asset you're holding (again, your Bitcoin) can simply be sold for $200 more because its market value increased.

What you may be asking is how exactly market value changes. The answer would be different for different assets (for the car example from other posters, you have to consider wear, tear, etc.), but for Bitcoin specifically, the answer mostly lies in the concept of supply and demand. Here is an easy read on the topic.

[SoiledDove]

The same principles apply to non cryptocurrency investments. In the past, you might buy shares which were worth $10 each. If they got devalued and returned you only $7, it doesn't mean that your money has gone anywhere. Maybe you could say that the amount has shrunk.  If you buy Bitcoin and it decreases in value, it's the same thing. Your Bitcoin may have cost you $10,000.  With the fluctuating market, the value could shrink to several thousand less. At the same time, It could also increase by several thousand. That's the game. Whether it' stocks and shares or cryptocurrencies, the principles are the same.

[chaddive]

If you invest in Bitcoin and have a low bitcoin rate, and at that time if you sell your bitcoin then you will surely face the loss. Wait until you get the price and then there will be no possibility of your loss.

[Dudeperfect]

To be honest, it is a theoretical case and it won't happen at all because if the person is losing his entire money then it will be a 100% overnight loss which is not possible at least for now in most of the major cryptocurrencies out there. But if the investment is falling to $900 from $1K then the loss of $100 is the profit of someone who bought Bitcoins at $800 and sold it for $900. In the case of a 100% loss, every investor will lose money.

[Alone055]

Every single time when the price of Bitcoin drops and we lose a portion of our investments, they go straight to satoshi's wallet, and he uses them to travel the world and have fun.  And every time the price grows, he takes loans to pay the profits that people have earned from their investments. It is a very complex thing, don't even ask!

[goldencrypto7100]

Drop of bitcoin price is very common in crypto market but again A can reclaim it when the price will raise. But he didn't entirely lose $1000. A just lost the price value.

[LinkinPrak852]

The money does not go anywhere. It just loses its value. It's like the entire appreciation and depreciation of currency.

[SlavSL]

Your 1000$ goes to the guy who sold you a Bitcoin worth 1000$ before it dropped to zero. He got youe money, you got the air.)

[EveningGull]

This curiosity is completely fine. But the money does not go anywhere. It just fluctuates in terms of its value. It either improves or worsens.

[BigSheep]

A' will not lose all his money as the value of Bitcoin can come as close to 1$ but never equal to zero. So, he can either decide to sell his coin and accept the loss he has made due to the value getting lowered or he can wait till the value increases over time and sell it for a good amount of profit. It's like an investment, you are paying for the perceived value.

[BigSheep]

The way you are calculating is wrong. Take the example of share market, you buy a company's share which is priced at 500$. After one month the company starts to have bad reputation and due to that the value of their share decreases in the market and gets priced at 50$. So, now you can decide to sell it at a 450$ loss or you can keep holding it till it increases again given that the company can overcome that situation.

[grey007]

If the A invests $1000 in bitcoin, then the next day the price of bitcoin drops dramatically and the A loses $1000, which makes me curious, where does the $1000 A money go?

In this situation if you invest in bitcoin 1000$ and lost all $, it can mean one thing - bitcoin = 0$ )
Most you have suffered losses, but the funds must remain... Or you play in casino)

[PoliteHyena]

There is a zero possibility of losing all your money. At least there will be some value left which 'A' can get back by selling the Bitcoin he owns. The way you are representing the case is wrong because it is not about losing the money rather here, the Bitcoin loses it's value and after being valued at a less price 'A' has to sell it and make a loss out of it.

[DimHorse]

That $ 1000 just got exchanged in the market and to satisfy the dropped market cap it gets dispersed over it. More often than not bitcoin drops in esteem when individuals are offering out vigorously. When they offer the cash gets into their wallet. That is they are changing over their bitcoin to fiat.

[CrashLamb]

There's no compelling reason to get inquisitive about it, Your cash isn't lost you just had a bit of bitcoin or changed over your fiat cash to bitcoin. The good thing is you simply need to sit tight at the cost to move back and increment again to pick up the benefit with it.

[justin86]

Someone wants to sell bitcoin at $1000, you give $1000 and get one bitcoin, after one day someone wants to buy bitcoin at $500 and you give your bitcoin to him and he gives you $500, now you have $500.

[redrose8226]

At first, you should truly take in the framework. Purchasing BTC with a capital of $ 1000 and you get around 0.1 BTC then that sum remains set up as long as you don't offer it once more, you simply sit tight at the offering cost that is higher than the value you purchased.

[crypto-bit456]

Actually it doesn't go anywhere. Investing in bitcoin means you have spent your money and converted your money into bitcoin. Now if the bitcoin price becomes lower, it means the converted money has less value. Now, it is your decision that if you will wait for the price to go higher or you will sell your coins at a low price now.

[TheBitcoinBadger10]

Compare this situation with buying something with your money. Suppose, you have bought something with your money, but this thing has lost interest among people, so, nobody wants to buy it from you. The thing you bought is still with you but you can't sell it with a good price. In case of bitcoin it is almost the same. But if you wait for a time, you can sell bitcoins at a higher price when the price goes higher.