Crypto Crash: 3 important Risks Pertaining to Crypto Investment

An unexpected fall in the price of BTC and other cryptocurrencies made everyone remember the type of
risk to be encountered in crypto assets investment.


As reported by coinpaga reports, altcoins like Dogecoin, XRP, Polkadot, Litecoin, and Etherum all got
deprived of important value and this deprivation may have been linked with late announcements from
the UK, US, and Turkish Governments in quest of investigating the use of cryptos for activities like
money laundering and its submission to the central bank in Turkey.


Generally, here are 3 major risks affiliated with crypto investment.


UNPREDICTABILITY


Cryptocurrency prices are unstable, having no specific value. They are solely digital assets that are not
supported by a physical commodity or currency.

Their value is determined by people’s interest in them.


If the demand for a particular cryptocurrency suddenly rises it results in its price going up. In the same
light, if for any motive people begin to sell off a particular cryptocurrency, it price falls with no
hesitation.

Read Also: Crypto trading: How to make money without loss

Owing to the assertion that an authorized or regulatory body for all this is lacking makes the
situation worse and increases the chance of market manipulation. This implies that Investor protection
is lacking.


Storage


Subsequently to acquisition or investment in cryptocurrencies, where to safely store them is a thing of
concern. In contrast to traditional money or shares which are easy to store in banks or with
stockbrokers, Limited options is a thing of concern to crypto traders and digital wallets still stands as the
universal adopted storage method.

By contrast, the latest study by a data company Chainalysis, estimated that owing to the issue of forgotten
passwords, around 20% of cryptos are either stuck in digital wallets or lost. This was made known to the
public by Oscar William-Grut, Yahoo finance’s UK reporter.

In agreement with the reporter, this amounts
to around $140bn worth of crypto investment bound in inaccessible digital wallets.
Fraud and hacks

This is with certainty the greatest challenge Nigerian cryptocurrency investors are facing. The probability
of being a victim of swindling in the Nigerian crypto market is quite high with a lot of fraudulent
constituent disguising as cryptocurrency exchange markets.


The regulatory body is absent and almost 100% of the dealings on the cryptocurrency market takes place
online.

In agreement with Yahoo Finance UK, through hacks intended towards Crypto Exchange
companies last year, half a billion dollars was lost.


What you should have in mind

Anything that has value has its own risk. Even though cryptocurrency is still a smart bet, it is significant to
bear in mind the above risks while investing.

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