Likely issues in the world of cryptocurrency

Even as many of us are still benefiting from the invention of cryptocurrency, it is an undeniable fact that there are many risks involved in investing in cryptocurrency.

Just like every other business, cryptocurrency also has its own risk and investors have to be careful before going into it. It is advisable that you meet someone who has a vast knowledge about cryptocurrency to teach you more about it before and after you become a crypto investor. In this article, I will outline many of the dangers involved in investing in cryptocurrency. These outlines are not to discourage you from participating in the coin market, but it is only meant to guide you as you invest in cryptocurrency so you don’t invest unwisely. Below are the dangers involved in investing in cryptocurrency:

1. Theft: Theft is one of the major risks involved in investing in cryptocurrency. According to statistics, more than $1 billion (US) was stolen last year mainly from exchanges. However, investing in crypto is still safe as many exchanges have now upgraded their security measures. The theft in cryptocurrency is mainly done by hackers. A person or group of people who finds a way of getting into people’s account and hence, they steal money or credentials from the account they've hacked. Exchanges like coincheck have suffered from hacking as well as other exchanges like Mintpal, swissCEX, etc. We should ensure we entrust our coins into the hands of safe exchanges so we don’t end up with big regrets.

2. Coin devaluing: Another risk of investing in cryptocurrency is the risk of devaluing. Trading is simply buying low and selling high. That’s why many investors who invested in bitcoins in 2009 are enjoying the benefits till today. No one will like to buy a coin and watch it devalue. This will result in loss of interest in further buying the devalued coin and maybe even in continuing with cryptocurrency. The coin market is very unstable and one can either gain from it or lose in it. The situation where most of the coins in the market lose their value is referred to as BEAR MARKET. Bear market is said to have occurred when a coin's value drops 20% or more below its former price.

3. Coin price stagnation loss: Coin price stagnation loss can be defined as a situation where an investor did not make the expected gain he wanted to make due to the failure of the coin's price to increase. For instance, if I invest $40,000 with an expectation of getting $42,000 at the end of the month. I would’ve lost my expected gains if the value of the coin stays at $40,000 and doesn’t increase in price.
4. Crashed market: Here, an investor invests in a coin or in an exchange that later crashes. The huge blow is mainly felt by the owners of the exchange. One should carry out enough research about a project before investing in it.

With all been said, investing in cryptocurrency is still a very good idea that turns people into millionaires overnight. One only needs to invest in the right project and he/she is good to go.