user64922: What happens if I buy Bitcoins and the price goes down. Will I lose a quantity of my money?
Consider:


user-1: No; you lost the money when you used it to buy the Bitcoins. If the price goes down, you will get less money back if you sell them. If the price goes up, you will get more money back if you sell them.

user64998: Yes, you lose a quantity of your money, at the time you gave it away in exchange for the bitcoin you received.  Subsequent changes in the exchange rate only vary the hypothetical value of what you would get if you wanted to trade back.

user65034: The answer is not unique to bitcoin. It would be the same if you're dealing with (non-crypto) foreign currency, stock, a stock derivative or commodity or commodity futures.
When you buy something like the above, you are giving up your "real money" (fiat currency) to take possession of said commodity/stock/bitcoin/etc (let's call these assets in general). You bought an asset at a particular market value, which can fluctuate over time. If it rises, it's worth more of the fiat currency. If it falls, it's worth less of the fiat currency.
While you're still holding on to said asset, what you're experiencing are called unrealised gains and unrealised losses. The valuation chart fluctuates, but you're not seeing your purse of fiat currency changing in any way after the initial outlay.
You won't actually feel the "pain" of a fall in value until you decide to sell the asset. At this point you will experience a realised loss. You will get back less of the fiat currency (real money) than you put in in the first place. Conversely, if the asset has risen in value, you'll get back more "real money" than you put in and you've made a realised gain.
(I simplified the analysis to omit things like trading overheads - brokerage fees and commissions, etc. that always apply (those things always eat at your gains and losses pretty much equally). And taxes are a complex and murky thing I won't touch. And all this assumes you paid "real money" you actually had in full for the asset. If you borrowed money to buy the asset, that's called trading on margin and it can be much, much riskier - you're losing money in interest all the time and your losses can be more than the amount you borrowed to begin with. But ignore all these complications and focus just on the paragraphs above to give you a head start in understanding. And please learn more (and try trading simulations) before you trade real money for any asset).

user62388: tl;dr-  This is called a capital loss.  You're said to realize the capital loss if you sell the Bitcoins at the lower price, such that you lost money due to having bought/sold them.  However, note that this isn't legal advice and I'm unsure about what the current legal statutes are surrounding Bitcoin.

Bitcoin's a capital asset (at least conceptually; dunno about legally):

A capital asset is defined to include property of any kind held by an assessee, whether connected with their business or profession or not connected with their business or profession. It includes all kinds of property, movable or immovable, tangible or intangible, fixed or circulating. Thus, land and building, plant and machinery, motorcar, furniture, jewellery, route permits, goodwill, tenancy rights, patents, trademarks, shares, debentures, securities, units, mutual funds, zero-coupon bonds etc. are capital assets.
-"Capital asset", Wikipedia [links omitted]

When a capital asset appreciates in value, it's called a capital gain, and may be subject to capital gains tax.  And when a capital asset depreciates in value, it's called a capital loss (and sometimes results in a reduced tax burden).
Until you actually sell the Bitcoins, the loss is considered unrealized:

What is an 'Unrealized Loss'
An unrealized loss is a loss that results from holding onto an asset after it has decreased in price, rather than selling it and realizing the loss. An investor may prefer to let a loss go unrealized in the hope that the asset will eventually recover in price, thereby at least breaking even or posting a marginal profit. For tax purposes, a loss needs to be realized before it can be used to offset capital gains.
-"Unrealized Loss", Investopedia [links omitted]

Once you do sell the Bitcoins, then you know how much money you've gained/loss.  This is called realization:

DEFINITION of 'Realized Loss'
A loss is recognized when assets are sold for a price lower than the original purchase price. Realized loss occurs when an asset which was purchased at a level referred to as cost or book value is then disbursed for a value below its book value. Although the asset may have been held on the balance sheet at a fair value level below cost, the loss only becomes realized once the asset is off the books.
-"Realized Loss", Investopedia [links omitted]


Summary
If you buy Bitcoins and they depreciate in value, then:

You've suffered a capital loss.

Before you sell the Bitcoins, it's an unrealized capital loss.

After you sell the Bitcoins, it's a realized capital loss.



user24974: If you bought one bitcoin and the price goes down, you still have one bitcoin.  If the price goes up...still one bitcoin.
This is just like everything else, including groceries, gasoline, gold, stock certificates, etc...  Measurements of value in fiat (such as dollars) does not affect the amount something you own, only the price at which you will be able to sell that something.

user10658: If you bought a bar of gold at $1200 / ounce, then the price of the gold drops to $600 / ounce, you wouldn't actually lose any money at all unless you decided to sell your gold at that time.  However, if you wait until the price of gold rises to $1800 / ounce, then sell it, you will gain money.  The key is an ounce of gold is still an ounce of gold, regardless of the "price" in some other currency.
Same goes for bitcoin, or indeed any currency.  If you trade it at one price, then subsequently trade it at a different price, you'll either gain or lose money.

64922: <p>What happens if I buy Bitcoins and the price goes down. Will I lose a quantity of my money?</p>

<p>Consider:</p>

<p><a href="https://i.stack.imgur.com/LRzpA.png" rel="nofollow noreferrer"><img src="https://i.stack.imgur.com/LRzpA.png" alt="Stock Market"></a></p>
 -1: <p>No; you lost the money when you used it to buy the Bitcoins. If the price goes down, you will get less money back if you sell them. If the price goes up, you will get more money back if you sell them.</p>
 64998: <p>Yes, you lose a quantity of your money, at the time you gave it away in exchange for the bitcoin you received.  Subsequent changes in the exchange rate only vary the hypothetical value of what you would get if you wanted to trade back.</p>
 65034: <p>The answer is not unique to bitcoin. It would be the same if you're dealing with (non-crypto) foreign currency, stock, a stock derivative or commodity or commodity futures.</p>

<p>When you buy something like the above, you are giving up your "real money" (fiat currency) to take possession of said commodity/stock/bitcoin/etc (let's call these <em>assets</em> in general). You bought an asset at a particular <em>market value</em>, which can fluctuate over time. If it rises, it's worth more of the fiat currency. If it falls, it's worth less of the fiat currency.</p>

<p>While you're still holding on to said asset, what you're experiencing are called <em>unrealised gains</em> and <em>unrealised losses</em>. The valuation chart fluctuates, but you're not seeing your purse of fiat currency changing in any way after the initial outlay.</p>

<p>You won't actually feel the "pain" of a fall in value until you decide to sell the asset. At this point you will experience a <em>realised loss</em>. You will get back less of the fiat currency (real money) than you put in in the first place. Conversely, if the asset has risen in value, you'll get back more "real money" than you put in and you've made a <em>realised gain</em>.</p>

<p>(I simplified the analysis to omit things like trading overheads - brokerage fees and commissions, etc. that always apply (those things always eat at your gains and losses pretty much equally). And taxes are a complex and murky thing I won't touch. And all this assumes you paid "real money" you actually had in full for the asset. If you borrowed money to buy the asset, that's called <em>trading on margin</em> and it can be much, much riskier - you're losing money in interest all the time and your losses can be more than the amount you borrowed to begin with. But ignore all these complications and focus just on the paragraphs above to give you a head start in understanding. And please learn more (and try trading simulations) before you trade real money for any asset).</p>
 62388: <p><strong><em>tl;dr</em>-</strong>  This is called a <em><a href="https://en.wikipedia.org/wiki/Capital_loss" rel="noreferrer">capital loss</a></em>.  You're said to <em>realize</em> the capital loss if you sell the Bitcoins at the lower price, such that you lost money due to having bought/sold them.  However, note that this isn't legal advice and I'm unsure about what the current legal statutes are surrounding Bitcoin.</p>
<hr />
<p>Bitcoin's a <a href="https://en.wikipedia.org/wiki/Capital_asset" rel="noreferrer">capital asset</a> (at least conceptually; dunno about legally):</p>
<blockquote>
<p>A <strong>capital asset</strong> is defined to include property of any kind held by an assessee, whether connected with their business or profession or not connected with their business or profession. It includes all kinds of property, movable or immovable, tangible or intangible, fixed or circulating. Thus, land and building, plant and machinery, motorcar, furniture, jewellery, route permits, goodwill, tenancy rights, patents, trademarks, shares, debentures, securities, units, mutual funds, zero-coupon bonds etc. are capital assets.</p>
<p>-<a href="https://en.wikipedia.org/wiki/Capital_asset" rel="noreferrer">&quot;Capital asset&quot;</a>, Wikipedia [links omitted]</p>
</blockquote>
<p>When a capital asset appreciates in value, it's called a <em><a href="https://en.wikipedia.org/wiki/Capital_gain" rel="noreferrer">capital gain</a></em>, and may be subject to <em><a href="https://en.wikipedia.org/wiki/Capital_gains_tax" rel="noreferrer">capital gains tax</a></em>.  And when a capital asset depreciates in value, it's called a <a href="https://en.wikipedia.org/wiki/Capital_loss" rel="noreferrer"><em>capital loss</em></a> (and sometimes results in a reduced tax burden).</p>
<p>Until you actually sell the Bitcoins, the loss is considered <em>unrealized</em>:</p>
<blockquote>
<p><strong>What is an 'Unrealized Loss'</strong></p>
<p>An unrealized loss is a loss that results from holding onto an asset after it has decreased in price, rather than selling it and realizing the loss. An investor may prefer to let a loss go unrealized in the hope that the asset will eventually recover in price, thereby at least breaking even or posting a marginal profit. For tax purposes, a loss needs to be realized before it can be used to offset capital gains.</p>
<p>-<a href="https://www.investopedia.com/terms/u/unrealizedloss.asp" rel="noreferrer">&quot;Unrealized Loss&quot;</a>, Investopedia [links omitted]</p>
</blockquote>
<p>Once you do sell the Bitcoins, then you know how much money you've gained/loss.  This is called <em><a href="https://www.investopedia.com/terms/r/realizedloss.asp" rel="noreferrer">realization</a></em>:</p>
<blockquote>
<p><strong>DEFINITION of 'Realized Loss'</strong></p>
<p>A loss is recognized when assets are sold for a price lower than the original purchase price. Realized loss occurs when an asset which was purchased at a level referred to as cost or book value is then disbursed for a value below its book value. Although the asset may have been held on the balance sheet at a fair value level below cost, the loss only becomes realized once the asset is off the books.</p>
<p>-<a href="https://www.investopedia.com/terms/r/realizedloss.asp" rel="noreferrer">&quot;Realized Loss&quot;</a>, Investopedia [links omitted]</p>
</blockquote>
<hr />
<h3>Summary</h3>
<p>If you buy Bitcoins and they depreciate in value, then:</p>
<ul>
<li><p>You've suffered a <strong><em>capital loss</em></strong>.</p>
</li>
<li><p>Before you sell the Bitcoins, it's an <strong><em>unrealized capital loss</em></strong>.</p>
</li>
<li><p>After you sell the Bitcoins, it's a <strong><em>realized capital loss</em></strong>.</p>
</li>
</ul>
 24974: <p>If you bought one bitcoin and the price goes down, you still have one bitcoin.  If the price goes up...still one bitcoin.</p>

<p>This is just like everything else, including groceries, gasoline, gold, stock certificates, etc...  Measurements of value in fiat (such as dollars) does not affect the amount something you own, only the price at which you will be able to sell that something.</p>
 10658: <p>If you bought a bar of gold at $1200 / ounce, then the price of the gold drops to $600 / ounce, you wouldn't actually lose any money at all unless you decided to sell your gold <em>at that time</em>.  However, if you wait until the price of gold rises to $1800 / ounce, <em>then</em> sell it, you will gain money.  The key is an ounce of gold is still an ounce of gold, regardless of the "price" in some other currency.</p>

<p>Same goes for bitcoin, or indeed any currency.  If you trade it at one price, then subsequently trade it at a different price, you'll either gain or lose money.</p>
