💡 FX and Fiat Conversion Risk: Why You Can “Lose” Without Actually Losing

When looking at my portfolio today, it shows a small daily PnL in red. But here’s the key point: I didn’t actually lose any coins. The amount of $EUR & $USDC I hold hasn’t changed.

So why does the portfolio value in USD drop?

👉 Because of foreign exchange (FX) conversion.

I hold a large balance in EUR.

Binance shows the total portfolio value in USD.

When EUR/USD falls, the same number of euros is suddenly worth fewer dollars.

This isn’t a trading loss, it’s a conversion effect.

Assets are intact.

But their relative value versus USD has changed.

If my expenses or benchmark are in USD, that difference is very real.

⚖️ The lesson:

In trading and investing, it’s not enough to count coins. You need to consider the currency you measure wealth in. FX exposure means you can “lose” value even without making a bad trade.