Top 3 Risks of Investing in Cryptocurrency

The demand for cryptocurrency investing continues to grow, not only among retail investors but also among institutional investors too. According to the recent Gemini crypto exchange survey, 14% of Americans have already invested in cryptocurrency. And that number could double by the end of the year. However, buying crypto-assets is not like investing in traditional financial instruments. It has its own risks and dangers.

High volatility
It is one of the key features of the crypto market. That means there is no need to panic, as it is very likely that a strong fall will be followed by an equally strong rise. Before you buy a coin, you should look at the historical behaviour of its price, as well as the average daily and monthly change. This will help you to understand the level of volatility and assess your preparedness for such risks.
The first investment in cryptocurrency is best made on the spot market. Without necessary skills, margin trading most likely will lead to losses. If you trade on margin, you can lose dozens of times more.

Incorrect storage
It is unreliable to store digital assets in high volumes on cryptocurrency exchanges. As long as the cryptocurrency is on a third-party site, it does not actually belong to any investor.
The best option is to store crypto-assets on a hardware wallet. The second option is to store it on your separate computer. If it is a matter of day-to-day trading, coins will have to be stored on cryptocurrency exchanges. But if your plans are long-term, it is better to choose a more reliable storage facility.

Errors in sending of funds
If an investor accidentally sends some cryptocurrency to a wrong address, there is no way to get these coins back. In blockchain, there are no controlling entities that can be asked to undo the transaction.
Blockchain is a decentralized network that has no managers, administrators or helpdesk.