cryptocurrencies
In today’s world, no investment can be considered 100% safe. Cryptocurrency, just like any other investment, has an element of risk. So, there can be no one answer as to whether cryptocurrency is safe to buy or not. Anyone looking to invest in cryptocurrency should only risk the amount he/she can afford to lose on this technology. Some people make huge mistakes by investing all their money on cryptocurrency without considering the risks involved.
Besides cryptocurrencies being incredibly unpredictable, they are yet to adapt in today’s market, and this is likely to take a decade or a few years for them to stabilize. But buying cryptocurrency, it would be wise if you can do in-depth research about the technology to determine whether it is worthy of risking your money or not. This is the only way you can make an informed decision regarding cryptocurrency.. Don't use plagiarised sources.Get your custom essay just from $11/page
Here are the reasons why it’s no longer safe to buy cryptocurrency:
Regulatory Concerns
To date, people from all corners of the world are getting enlighted about what cryptocurrencies are and what is unique about them. Legal and regulatory concerns are the main challenges facing the crypto industry until today.
Since cryptocurrencies are new in the market, governments and banks are yet to form a comprehensive fiscal policy for the technology.
Market Manipulation
Even though there are no facts to prove this, there is a belief that the cryptocurrency industry is marred by insider trading, market manipulation, and collusion.
Many people are of this opinion due to the abnormal rise and fall in the value of coins in the space of hours to days. This is one of the reasons why most investors are reluctant to invest in cryptocurrency. Due to this, there is a growing fear that their trading rules might be unlawful, and their tax status may change overnight.
Hacks
This is not something new in the crypto industry. Every year the crypto industry loses a considerable amount of cryptocurrencies to theft. For instance, in the year 2018, the cryptocurrency industry lost $1.7 billion to theft. Information security is one of the significant problems cryptocurrency is yet to address.
As an investor, to access your wallet account, you need a login ID and a password. You can lose access to your account in case you forget your password or username. The other way you can lose access to your account is if someone with ill motive comes across your login credentials. Hacking is the other way; you can lose access to your account, and times lose your currency to theft. Keep in mind that login credentials should not be disclosed to any other person for security purposes.
Less Investor Protection
Cryptocurrencies such as ICOs offer less investor protection when compared to traditional securities markets. Since they are prone to fraud and manipulation, investors are less protected in the event of theft. However, this is likely to change over time, considering the recent judge verdict that ICOs are considered securities.
Investing in cryptocurrency is a good idea, but it is essential to have an in-depth understanding of how it works and the risks involved. This will help you to make well-informed decisions increasing the chances of making profits.