The Risks of Cryptocurrency:
However how promising cryptocurrency may seem right now, investing your entire life savings on this technology can be a huge mistake. Cryptocurrencies are becoming more and more volatile since they have yet to adapt to today’s market. It is therefore very important to avoid investing your entire savings since it slaughters your financial position and exponentially decreases your investment capacity in other meaningful projects. Below are some of the reasons that make trading with cryptocurrency a risky endeavor.
Research challenges.
Doing appropriate research of the type of the cryptocurrency you want to invest in and possessing appropriate skills to identify cryptocurrency that is performing well is one of the most critical factors that determine your success in the cryptocurrency market. For instance, making a decision centered on hype makes many to overlook some of the fundamental cryptocurrency facts thus end up making huge loses. Making sure you pick the right Australian cryptocurrency exchange is important, as there are many dodgy exchanges out there.
Regulatory Issues:
Despite the fact that many people are knowing about Cryptocurrencies day after day, the tough legal issues and regulations differences in indifferent countries are some of the big problems that are hindering Crypto currency's progress faster. For instance, most governments and banks in the world have not yet set coherent fiscal policies to regulate the techno in the global market. Additionally, the taxation statues and the trading rules are likely to change overnight, therefore, be very cautious before investing.
Market Manipulation:
There is some believes that there are some collusion and insider trading across the entire Cryptocurrency although not proven beyond any reasonable distrust. For instance, the pump and dump incidences where the value of coins shoot and fall within a few days or hours has made insider traders make huge gains at the expense of the entire market.
Hacks:
It has become very common that considerable Cryptocurrency amounts have been stolen almost every year to a normal coincidence. For instance, in 2018 an amount not less than 1.7 billion dollars were stolen in just one year and despite the heist, the technology has not yet shaken up to this time.