Is cryptocurrency safe?

By Cryptorufus7777 | Cryptorufus7777 | 7 Mar 2021

It's possible to get filthy rich by investing in cryptocurrency. But you could also lose all your money. How can both of those things be true? Well, crypto assets come with a host of risks but also vast potential rewards.

There are certain risks present in the crypto market that are not as prevalent in traditional financial markets. Cryptocurrency exchanges have been prone to hacks and other criminal activity. These security breaches have led to sizable losses for investors who have had their digital currencies stolen, never to be seen again. 

Frauds and scams are also rampant in the crypto industry.

It's not as easy to store cryptocurrencies as it is to store stocks or bonds. While exchanges such as Coinbase make it fairly easy to buy and sell crypto assets, many people don't like to keep their digital assets on exchanges, due to the aforementioned risk of cyberattacks and theft. Instead, some prefer offline "cold storage" options.

There's also the risk that the crypto project you invest in will not succeed. There are thousands of blockchain projects, and competition is fierce. Regulators could also crack down on the entire crypto industry if more governments begin to view cryptocurrencies as a threat rather than just an innovative technology.

Lastly, it's important to understand that cryptocurrencies and blockchain in general are cutting-edge technologies.

But, "your money your rules!"

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