High-Risk Investments in 2026: Real Examples and Losses

Important disclaimer: This article is for informational purposes only and does not constitute investment advice. It does not recommend any product or tell you what to invest in.

When it comes to high-risk investments, the first thing you need to understand is that you could lose a large portion of your investment, or even all of it. This is not just a general warning. Below, you’ll find specific examples with real loss figures and market data to help you understand the scale of these risks.

If you’re looking for a general guide to what high-risk investments are and how they work, check out this article. Here, the focus is on specific cases and what has actually happened.

What Makes an Investment High-Risk?

Not all risky investments are risky for the same reason. Some experience significant price fluctuations, others are difficult to sell, and some can multiply your losses if the market moves against you. Here are four factors that can substantially increase risk:

• Volatility: The price rises and falls sharply over short periods.
• Low liquidity: You may not be able to sell quickly or without taking a substantial loss.
• Leverage: You invest more money than you have, amplifying both gains and losses.
• Concentration in a single asset: You put a large amount of money into one project, company, or cryptocurrency instead of spreading it across different assets.

The relationship between returns and risk is direct. In other words, the higher the expected return, the greater the risk. However, taking on more risk does not guarantee higher profits. In fact, investments with greater upside potential are also more likely to experience significant declines or lose all their value.

Cryptocurrencies: Losses of More Than 80%

Cryptocurrencies are one of the clearest examples of high-risk investments. Bitcoin, the cryptocurrency with the largest market capitalization, has experienced several declines of more than 80% from its previous highs during earlier market cycles. Some of these examples may sound familiar:

• 2011: Its price fell by 93.8% in 163 days, dropping from around $31.91 to $1.99. A decline of this magnitude means that a $1,000 investment would have been worth just $62.
• 2013–2015: Bitcoin lost around 85% of its value between November 2013 and January 2015. It took a little over three years to surpass its previous all-time high.
• 2017–2018: After reaching nearly $20,000 in December 2017, its price fell by approximately 84% over the following year. It did not recover enough to surpass that previous high until December 2020.
• 2021–2022: Between November 2021 and November 2022, Bitcoin fell by approximately 77.5%, dropping from nearly $69,000 to around $15,500. It took a little over two years to surpass its previous all-time high again.

The general trend is that drawdowns have become less severe as the market has matured. However, even in the latest cycle, Bitcoin fell around 55% from its October 2025 peak.

If you think Bitcoin has performed badly during these bear markets, imagine what happens to projects that end up being worth zero. During every bear market, a significant number of altcoins in the top 100 disappear or fail to recover their previous highs. This means that even when the overall market recovers, not every project does.

Startups and Equity Crowdfunding

Investing in startups through equity crowdfunding campaigns means providing funding to early-stage companies in exchange for an ownership stake. Some companies grow and establish a successful business, while others never become profitable or eventually shut down.

The risk is that if a company fails, you could lose all the money you invested. If the business is clearly struggling, it may also be difficult to sell your stake and recover your capital before the company closes or finds a new funding opportunity. This means your money could remain tied up for years.

The European Securities and Markets Authority (ESMA) warns about the risks associated with this type of investment, particularly the lack of liquidity and uncertainty surrounding companies’ future performance.

Before investing, review the business model, available financial information, and the terms of the investment. Just because a company has an attractive idea or successfully completes a crowdfunding campaign does not mean it will succeed.

Leveraged Products

There are also CFDs, futures, and financial options, which are leveraged products that can multiply both gains and losses. The problem is that if the market moves against you, you could lose a significant amount of money in a very short time. In some transactions, you may even lose more than your initial deposit.

This is far from an uncommon risk. According to Spain’s National Securities Market Commission (CNMV), between 70% and 90% of retail clients lose money when trading CFDs, depending on the provider. That is why these products must include warnings about potential losses, although people do not always take them into account.

Leverage can cause a relatively small market movement to have a substantial impact on your investment. Before trading, you need to understand how the product works and how much money you could lose. Don’t let FOMO driven by social media or Instagram gurus influence your decisions.

Peer-to-Peer Lending

Loan crowdfunding and peer-to-peer lending can also offer attractive returns, but they come with significant risks:

• Default risk: If the borrower fails to repay the money, you could lose some or all of the capital you lent.
• Lack of liquidity: On most platforms, you cannot withdraw your money early, or you may only be able to do so at a substantial discount.
• No real collateral: Many loans are not backed by sufficient collateral to cover the exposure if the borrower defaults.

Recovery rates in debt crowdfunding are undoubtedly better than those in equity crowdfunding. Even so, the average recovery rate in the event of default is around 67%, meaning that investors still face the risk of substantial losses.

Questions to Ask Yourself Before Investing

Before putting money into any high-risk investment, ask yourself these questions:

1. How much can I afford to lose without affecting my fixed expenses? You should only risk money you are prepared to lose entirely without putting your personal finances at risk.
2. When will I need this money? If you might need it in the short or medium term, high-risk investments may not be suitable because you could be forced to sell at the wrong time.
3. Do I understand how this product makes and loses money? If you cannot explain in two sentences how it generates returns and what could cause you to lose money, you probably should not invest in it.
4. Is the provider authorized? Before trading with any investment platform or service provider, check whether it is authorized in the CNMV’s official registers.

If you want to look at the other side of the equation, read this article on low-risk investments to compare different risk profiles and decide which one best suits your needs.

High-risk investments can generate significant gains, but they can also lead to painful losses. Historical data shows that this is not merely a theoretical possibility. Entire market cycles have seen losses of more than 80%, and some projects have ended up being worth zero. Take the time to analyze the risks before making any decisions.

Disclaimer: This article is for informational purposes only and does not constitute investment advice.

FAQ

1. What Is Considered a High-Risk Investment?

Any investment with a high probability of suffering significant losses or losing all its capital. These investments often involve high volatility, low liquidity, leverage, or concentration in specific assets such as startups, cryptocurrencies, or derivatives.

2. Can You Lose More Money Than You Invested?

Yes. With certain leveraged products, such as CFDs or futures, you may lose more than your initial capital if your losses exceed the collateral you deposited. This is why European regulations limit leverage for retail clients and require clear risk warnings.

3. Are Cryptocurrencies a High-Risk Investment?

Yes. Bitcoin has experienced declines of more than 77–84% during several market cycles, and many altcoins have ended up being worth zero. Even in more mature markets, corrections of 50% or more remain common.

4. How Can I Check Whether an Investment Provider Is Authorized in Spain?

You can check the official CNMV registers, which list entities authorized to provide investment services in Spain. Before using any platform, make sure it appears in that register.

5. What Is the Difference Between Risk and Volatility?

Volatility measures how much an asset’s price changes over a given period. Risk is a broader concept because it also includes the possibility of losing money, being unable to sell when you want to (liquidity risk), or the issuer going bankrupt. An asset can be highly volatile without necessarily being as risky as it seems, provided you fully understand what you are buying.