Can You Lose All Your Money With an AI Trading Bot?
With leverage, yes: a bot trading borrowed money can be wiped out in a single crash, and on October 10, 2025 about $19 billion of leveraged crypto positions were liquidated in a day. Without leverage, a bot buying only coins it can pay for can't fall below zero, but it can still fall a long way. Botsfolio's AI trades spot only. Tested from 94 start dates since 2018, its worst start still finished up about 14%, but the unluckiest start fell 59% below the money put in along the way. Holding the same coins fell as far as 82.7% below. Limit the risk with spot trading, an amount you can sit through, and a record whose worst drop you have seen.
The scariest posts about trading bots read the same way: months of small gains, then one day that erases all of them. It happens. Whether it can happen to you depends on two things far more than on the bot's "AI": leverage, and how far the strategy can fall.
Leverage is how accounts go to zero
A bot trading with leverage borrows to make bigger bets. A 10x position loses everything on a 10% move against it, and the exchange closes it for you. On October 10, 2025, a sharp drop liquidated about $19 billion of leveraged crypto positions in a day. Bots with stops and bots without them were closed alike.
Without leverage, the math is different. If you buy $1,000 of bitcoin with $1,000, the worst case is that bitcoin falls a lot. Your account can't go below zero and nobody force-closes it.
Botsfolio AI trades spot only. It buys coins it can pay for, never borrows, and can't be liquidated.
How far can an AI portfolio fall?
Spot trading still falls. The honest way to size the risk is to look at the worst outcomes across many start dates, not one lucky stretch. Here is the BTC & ETH Cycle Trader, tested from every monthly start since 2018, next to simply holding the same coins:
BTC & ETH Cycle Trader from 94 different start dates: ahead of holding BTC and ETH from 94 of them.
| Across every start date | Botsfolio AI | Holding |
|---|---|---|
| Median yearly return | +33.3% | +23.7% |
| Worst start, total to date | +14.0% | -37.8% |
| Best start, total to date | +4103.0% | +2228.6% |
| Typical biggest drop | 37.5% | 75.5% |
| Worst biggest drop | 61.4% | 88.0% |
| Deepest fall below the money put in | 59.0% | 82.7% |
| Longest time below the money put in | 16 months | 33 months |
Read the worst rows carefully. The unluckiest start saw its money fall about 59% below what was put in, and the longest any start stayed below its deposit was about 16 months. Holding the same coins was worse on both counts. Neither is "safe" in the everyday sense of the word.
This year, the live record looks calmer:
Deep falls also take a lot to recover from. A 50% fall needs a 100% gain to get back:
More on reading these numbers in our guide to drawdown.
What a stop order does, and what it can't
A stop order sells when price falls to a level you set. It caps most losses, but not every loss:
- Gaps. If price jumps straight past the stop, the sale fills lower than the stop price.
- Fast markets. In a crash, exchanges can cut or reject market orders, and a stop-limit order can miss entirely if price falls through its limit.
- Outages. An exchange can slow down or pause trading at the worst moment.
Botsfolio places its stop orders on the exchange itself, so they work even if our servers don't. It also checks every minute, and if a stop was touched but didn't fill, it sells at market a few minutes later.
Your controls
You can stop the AI or disconnect your exchange at any time, and your money never leaves your own account:
| When you | What happens |
|---|---|
| Stop the portfolio | The AI stops trading and cancels its open orders, stop orders included, within about a minute. Nothing is sold, so there is no exit fee. The coins stay in your account, yours to keep or sell, with no stop order under them. |
| Disconnect the exchange | Botsfolio first cancels its open orders on the exchange, then removes your keys or sign-in and stops the portfolios on that exchange. Anything the exchange won't cancel is listed so you can cancel it there. |
| Credit runs out | New buys wait until you add credit. Sells and stop orders always run, so a falling coin is never left without its stop. |
| Withdraw your money | Any time, on your exchange. Botsfolio never holds the money you trade and has no permission to withdraw it. |
How to keep a loss survivable
- Trade spot, not leverage. Leverage is what turns a bad day into zero.
- Use an amount you can sit through. Size it to the worst drop in the record, not the best return.
- Look at the worst drop before you start. And compare it with simply holding the same coins.
- Start on paper. Watch a few weeks of live prices with no money at risk.
- Keep the money on your own exchange. So a bot company can't lose it for you.
The step from paper to real money is covered in paper trading vs real money.
The 94-start figures are a backtest on past prices with a 0.10% fee on every trade. The 2026 chart is Botsfolio AI's paper trading record on live prices. Neither is a promise about the future.
FAQ
Watch Botsfolio AI trade live
Botsfolio AI paper trades on the live market, and every entry, stop and exit is public.
- BTC & ETH Cycle Trader+24.2% vs -13.8% buy & hold in 2026 · biggest drop 8.7% vs 46.5%
- BTC & ETH Trend Rider+3.9% vs -13.8% buy & hold in 2026 · biggest drop 6.0% vs 46.5%
- BTC & ETH Steady Trader+2.6% vs -13.8% buy & hold in 2026 · biggest drop 3.2% vs 46.5%
- Bitcoin Cycle Trader+3.2% vs -8.2% buy & hold in 2026 · biggest drop 4.8% vs 39.6%
- Crypto Cycle Trader+27.9% vs +8.7% buy & hold in 2026 · biggest drop 12.4% vs 45.5%
- Altcoin Trend Rider+31.7% vs +12.9% buy & hold in 2026 · biggest drop 13.4% vs 50.2%
- Memecoin Trend Rider-6.3% vs -36.6% buy & hold in 2026 · biggest drop 10.5% vs 63.2%
How to read these numbers: the buy and hold comparison, biggest drop, and how the portfolios are tested.
See everything Botsfolio AI trades live
Paper trading on real prices. Not investment advice.
Educational analysis, not financial advice. Backtests are tests on past prices and paper trading results are simulated. Trading crypto can lose money, including more than you expect. Past performance does not predict future results.