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What are the Risks of Investing in Cryptocurrency?

Risks of investing in Crypto


Nowadays cryptocurrency is a very trending topic. People are getting more and more interested in the crypto market. People who are interested in investing in crypto should also know the potential risks involved in the business. 

Cost volatility

Cost volatility is the major risk factor involved in the crypto trading market. People invest in cryptocurrency based on their speculation. Most people invest in crypto while just hoping that the price of their crypto-asset will only go up. 

You can just choose to invest expecting that the price of a particular asset will go up withdraw just before you think it might crash.

Trading Charges

People should be aware of trading charges charged by different crypto exchanges before they proceed with their investment. Trading charges can have a significant impact on your investment. 

You never know how much profit you are going to earn but the trading fee is permanent. You have to pay for it whether you make a profit or not.

Cryptocurrency is not physical

Cryptocurrency is not something that you can hold in hand. It is fully digital. Lots of cryptocurrencies continue to be created daily. It is not regulated or controlled by anyone. 

It can be transferred online to anyone without involving a particular gateway for approval. No Government or private organization has it under its control.

It is still in development

Blockchain and other crypto technologies are still in the development phase. Only a few companies have adopted this technology. It has a scalability problem i.e. limited rate at which the bitcoin network can perform transactions. 

This issue is still to be fixed. Blockchain is also trustless as no intermediary like a payment company or banking institution is involved. Transactions are verified by a distributed network of nodes that is known as mining.

Easy manipulation

Big influencers and celebrities can easily manipulate the market. We have seen instances of some people manipulating the market in the past few months. 

People just follow the steps of these celebrities. While these celebrities make huge profits and some people end up investing their life savings and risking the future of their families. 

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