Investing in cryptocurrency: what are the risks?

What is a cryptocurrency – a high-risk investment tool or a panacea for the development of technologies and new payment systems? Let’s try to figure it out.

Most cryptocurrencies have an emission ceiling (issuance of new coins into circulation). That is, upon reaching a certain number of coins, further turnover of funds will be achieved solely by increasing the price of the currency itself. This is exactly what potential investors react to, who use cryptocurrency both for short-term and long-term earnings by trading on the stock exchange, and for buying goods on the Internet, making anonymous, fast and direct transactions. 

By the way, the current exchange rate and useful news from the world of cryptocurrencies can be found at

The use of cryptocurrencies as a means of payment is contrary to many laws. Accordingly, cryptocurrency in the context of the current legislation of many countries of the world cannot be considered and used as money, a financial instrument.

In addition, there are high risks of losing funds when buying cryptocurrencies due to their high volatility, anonymity, lack of real assets. The observed surge of interest in cryptocurrencies and investing at the “peak” of prices can potentially lead to another “soap bubble”, which investors should be aware of when purchasing this digital money.

Most popular cryptocurrency

Bitcoin is the most expensive and popular cryptocurrency. At the very beginning of the popularity of cryptocurrencies, all new coins worked on the Bitcoin blockchain. In the current environment, investing in bitcoins by investors in the markets may have the following risks:

  1. Bitcoin is not a financial instrument under the laws of many countries of the world and is not included in the perimeter of state regulation as an investment object. Accordingly, investors investing in bitcoin should be aware of their personal responsibility in the event of problems with transactions, settlements, or adverse scenarios.
  2. The price of bitcoin is characterized by high volatility. The risks of volatility are explained by the lack of fundamental fundamentals of Bitcoin pricing and the influence on its price of mainly behavioural factors on the part of investors – mass hype, investors looking for alternative ways to invest with high returns, etc. For example, during October, growth was observed, which was about 10-15%. However, in November there was a sharp drop of 20%, and this happened in just a few days.
  3. Bitcoins can be used by scammers. The lack of reliable regulated platforms for bitcoin trading facilitates the simplification of fraudulent actions against potential investors, the loss of personal and card data, as well as funds. In world practice, there are repeated cases of hacking and theft of significant funds from cryptocurrency platforms and exchanges. Every year, the damage from the theft of cryptocurrencies can be about $1 billion.

In addition, cryptocurrencies can be used to circumvent anti-money laundering and anti-terrorist financing regulations. Therefore, investors need to be as careful as possible when making transactions with bitcoins.


With the help of cryptocurrencies, you can really earn a lot. However, all operations with cryptocurrency are carried out at your own peril and risk. Any operations with cryptocurrencies are highly risky and do not guarantee the safety of the invested money. Therefore, it is necessary to understand for oneself whether a person is able to take risks and lose the money invested. However, this risk also has its own reward – a possible large profit and access to new financial opportunities, and, consequently, tools.

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