Cryptocurrency is getting better compared to recent years, and if you are not updated with the latest news, Bitcoin has recently reached its all-time high. That’s right, its market value has increased, and people who have invested are happy about it. Added to that, Ether also hit its all-time high. If you haven’t invested in crypto, you might be missing out on something big.
If you are new to the crypto world and you want to get involved through investing or day trading, one of the many essential things you should be aware of is that cryptocurrency has risks. There were a few investors who didn’t prepare themselves for these risks, and it heavily affected their investments. As a new investor, you should be well prepared before you start spending your money. It is advisable that you turn to a website with 24/7 support and beginner-friendly software like the Bitcoin Superstar crypto trading platform. In this article, we will show you a quick guide on what you should prepare for to avoid the risks associated with crypto.
Considering that there are more than 1600 varieties of cryptocurrencies, this vast number ensures that there’s a thing for everyone and anyone looking to get into cryptocurrency. Though that doesn’t necessarily mean that you’re going to get big with your assets – the ease of entry with cryptocurrency with a bottlenecked exit means that you’re going to struggle as you exit your investment with particular crypto coins.
If you think of it like everyone rushing to get into the stores during Black Friday, you’re for sure to get caught in the mayhem and may even find yourself struggling to get out. Reasons for a bottlenecked exit with cryptocurrency could be due to the technological difficulties, currencies being inconvertible, and a very little party of those who would like to trade. In addition, you wouldn’t want to get caught in the panicked reaction of the crypto market.
Not Physical, Uninsured, and Illiquid
One of the desirable traits that cryptocurrency does possess is that it is decentralized. Therefore it doesn’t have to go through the painstaking process that banks and centralized markets go through. However, although it might be desirable, that doesn’t guarantee its usability and its insurability when it’s time for you to use your crypto coins.
Cryptocurrency is entirely digital, so you’re sure to encounter some struggle when you want to spend your coins – which brings up the struggle of converting your coins. Not to mention the inherent volatility that cryptocurrency’s nature has, you’re going to find it challenging to choose the best times to cash out – since the values are constantly fluctuating.
Prone To Manipulation and Extortion
In the first place, when dealing with cryptocurrency, you should be using money that you’re already prepared to lose. However, in the rare case that you aren’t ready to do so with your crypto, then you might be subject to social engineering and misinformation risks. In addition, especially those newer to the crypto world can be easily susceptible to extortion, fraud, and market manipulation.
Being an investor in cryptocurrency means that you should be prepared for any of the malicious attacks that could come your way – which means that you should double down on your security as much as you can. Ensure that the exchange platforms you’re active on can guarantee your asset security since it will burn a hole in your pocket if your assets get stolen from underneath your nose.
Not only are the newer investors prone to such unfair treatment, but there are still some veteran investors that can still fall under the traps of investment scams and other attacks like phishing and hacking – which nobody would ever like to happen to them. Not to mention that most of the transactions that occur are irreversible and untrackable by normal means since most of the information is basic and confidential.
There are plenty more risks associated with cryptocurrency, so if you’re looking to make it big time in the crypto world, you’re going to need to do some thorough research. In addition, you’re going to need to make up some plans and follow some strategies that other big-timers made – though you could always add your twists to the strategies and tactics.