Define what you risk
Use a share of your wealth that does not compromise your living costs. Many people prefer small amounts per trade.
Crypto basics and why people invest
A plain-language guide for anyone starting out: what cryptocurrencies are, why their prices swing so much and how risk is managed.
Notice
This page is informational only. It is not an investment recommendation and promises no return. Digital assets are volatile and you can lose part or all of your capital.
It is meant for people who have heard of cryptocurrencies but never used them, and for those who want to understand what a platform like Aurora Capital does before depositing. You need no IT or finance background; the concepts are explained step by step, with examples and tables.
What cryptocurrencies are
A cryptocurrency is a digital asset that exists only in electronic form and is recorded on a blockchain, a shared ledger that many computers keep in sync. Nobody can change a record on their own, which is why transactions are hard to alter. Like any asset, its price comes from supply and demand: if more people want to buy than sell, it rises; if the reverse, it falls.
There are thousands of different cryptocurrencies. The best known are Bitcoin, created as a form of digital money without intermediaries, and Ethereum, a network on which applications are built. Others, called stablecoins, aim to keep a value close to the dollar. They do not all carry the same risk: the largest and most traded tend to be more liquid, while small ones can lose almost all their value or disappear.
| Concept | What it means |
|---|---|
| Digital asset | An item that exists only in electronic form and can be bought, sold or transferred. |
| Blockchain | A shared record of all transactions, organised in linked blocks. |
| Wallet | An app or device where you keep the keys that let you use your cryptocurrency. |
| Exchange | A platform where cryptocurrencies are bought and sold, normally against pesos or other currencies. |
| Supply and demand | The quantity available against the quantity people want to buy; together they set the price. |
This is how a transaction travels, in simplified form:
You sendYou say to whom and how much you want to send from your wallet.
It is signedYour private key authorises the transfer without revealing the key.
It is validatedThe network checks you hold the funds and that they were not spent before.
It is recordedThe operation is added to a block and stays in the ledger.
Why some people invest in crypto
Four reasons come up most. The market runs 24 hours a day, every day of the year, unlike the stock exchange. It lets you start with small amounts. It offers a way to diversify wealth outside traditional assets. And many people believe in the technology behind it.
Each of those reasons has a flip side: a market that never closes can also fall while you sleep, small amounts do not prevent losses, and diversifying with a volatile asset can raise your total risk instead of lowering it. Deciding whether it suits you means looking at your own situation, not other people's.
Why prices move
A cryptocurrency price can move several percentage points in a day. There is rarely a single cause; several factors tend to combine, reinforcing or cancelling each other.
That is why it pays to distrust simple explanations of a price move. When someone says they know for sure why something rose or fell, they are usually explaining it after the fact. Analysis systems like Aurora Capital's do not predict the future: they measure probabilities from price and volume data, and those probabilities can be wrong.
| Factor | How it influences price |
|---|---|
| Trading volume | With heavy volume the price moves more steadily; with little, one large order can move it a lot. |
| News | Regulatory announcements, hacks or partnerships can change expectations within minutes. |
| Investor sentiment | Optimism and fear lead people to buy or sell en masse, sometimes with no underlying reason. |
| Global economy | Interest rates, inflation and the value of the dollar affect appetite for risk assets. |
A piece of data arrivesNews, an economic indicator or a large move.
Expectations changeParticipants reassess what the asset is worth.
Orders adjustBuyers and sellers modify their prices.
The price movesA new balance point is reached, until the next data point.
What volatility is
Volatility measures how much and how quickly an asset's price changes. High volatility means large swings in a short time, both up and down; low volatility, smaller and more gradual changes. Cryptocurrencies are usually more volatile than the dollar or government bonds.
For you, that means an investment can lose value quickly, and decisions taken in the heat of the moment are usually the worst ones. Setting a loss limit in advance helps you avoid improvising in the middle of a fall.
An example helps. If you invest COP 1,000,000 and the asset drops 20% in a week, your balance becomes COP 800,000. To get back to one million it is not enough for it to rise 20%: it needs to rise 25%. That asymmetry is one reason controlling losses weighs as much as seeking gains.
| High | Low | |
|---|---|---|
| Moves | Sharp and frequent | Small and gradual |
| Opportunity | Larger possible gain | Smaller possible gain |
| Risk | Fast losses | Slower losses |
| What to watch | Limits and position size | Costs and fees |
What risk management is
Managing risk means deciding, before you trade, how much you are willing to lose and how you will act if the market goes against you. It does not remove losses, but it stops a bad run from knocking you out or forcing you to sell at the worst moment.
Diversify
Spreading capital across several assets reduces the weight of a single mistake, though it does not protect when the whole market falls.
Use limits
The platform lets you set a loss limit per strategy and can pause trading when volatility passes certain thresholds.
Review and adjust
The dashboard shows results and fees. Check it regularly and change the strategy if it no longer fits what you want.
A practical rule is to separate three pockets: the money you need to live and for emergencies, the money you want to save with little risk and the money you are willing to expose to volatile assets. Only the third should go into crypto, and it should be an amount whose loss would not change your life.
These tools help organise decisions, but Aurora Capital does not make investment decisions for you in the sense of advising you, and does not guarantee any result. The final judgement is always yours.
Questions beginners ask
Is cryptocurrency money?
It is used as a means of payment in some places and as an investment asset in many others, but in Colombia it is not legal tender. The Colombian peso is the only currency with that status, and cryptocurrencies are treated as digital assets.
How much money do I need to start?
You can buy fractions of a coin, so technically a small amount is enough. At Aurora Capital the Basic plan starts at COP 1.000.000, and the prudent approach is to use only money you can afford to lose.
Is it safe to keep crypto on an exchange?
It depends on the exchange. One with good controls lowers the risk but does not remove it: it can be attacked or fail. That is why it is wise not to leave more there than you will trade, and to protect the account with two-factor authentication.
Does an automated platform guarantee profit?
No. None does. Automation applies rules quickly and consistently, but the market can move against any strategy.