Top Risks Involved in Crypto Assets Investment

Many financial institution investors worry about risks in credit, market, and operations. As a result, investors are looking for alternative platforms that offer as much benefits. One bankable option they have blockchain technology. This new market is preferred for improved risk management and better operational efficiencies. However, just like in traditional financial institution, investing in cryptocurrency also comes with risks. That’s why many are studying the industry to learn how to ensure they’ll get profit from their investment. Some even take up cryptocurrency course to give them a good head start on their new investment journey.
As a newbie, you may be looking for ways to avoid common risks. Good thing we have listed some of them below.

The risk of valuation
Since cryptocurrency is still a new market, it can be hard to figure out how much a certain cryptocurrency is worth. The risk of valuation has been one of the risks outlines by SEC. It is the imperfect way of figuring out what a certain investment should be worth. In traditional investment, they generally use ratios such as a stock’s price, growth, profits, or cash flow. However, unlike companies which generate cash flows, cryptocurrencies work differently as it cannot be valued in this way. The currencies can only be traded or priced similar to other global currencies.

Cryptocurrencies are not easy to trade
The crypto market is still volatile, making it tricky to use it in trading. Its current price can change in an instant. Thus, you can just imagine how challenging it can be to sell something not knowing whether it will become more or less valuable the next day. In a letter by SEC, they have expressed concerns on how digital currencies are not liquid enough. Thus, it cannot be included into licensed funds.

Cryptocurrencies are not easy to store
Despite the growing number of crypto security service provide, it is still not easy to store. Many are still confused of different algorithms in storing cryptocurrencies that few people understand where to place them. Take the case of Quadriga who reportedly lost access to C$190 million of their customers’ assets after their CEO, Gerald Cotton, suddenly passed away.
No one in their crypto exchange company knows how to recover the cryptocurrencies held for clients.

The goal is to have a system that can help safeguard crypto funds without the need for middlemen. Right now, there are no licensed custodians who works on safeguarding the quality of every digital currency transaction. This is one of the problems many crypto enthusiasts are trying to solve.  

There are many hackers and scammers
It’s no secret that there are many hackers and scammers in the crypto sphere. They target startups and established businesses, even individuals who just joined the industry. If you already have invested a huge amount in coins, you need to take some precautions.

If you want to take your career in bitcoin trading in Singapore to the next level, contact Crypto Trader today. They offer crypto courses designed to help you learn about proven and tested strategies straight from a crypto-trading expert. Check out their website for details.

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