• Written by MISS.com.au

Virtual currency is being viewed as the future of currency exchange. Buying and selling goods and services online with a common global currency sounds like a method that could save commerce without having the complications of national money. Bitcoin is the most valuable cryptocurrency to date but it also comes with its disadvantages. Despite its popularity, there are some considerable risks when investing in crypto. With so many people investing in cryptocurrency, it is important to be aware of the risks involved in this kind of investment.

In this article, we will look at the top risks involved in investing in Bitcoin and how to avoid them.

  1. Fluctuating and volatile market

The value of Bitcoin changes constantly. In November 2018 the value of Bitcoin was $6461 If you had bought Bitcoin in December 2017 the price topped $20000. On 24 December 2017, buyers could not sell Bitcoin for more than $14626. The Bitcoin market is highly volatile. With such a fluctuating market it can be hard to know whether you will make a return on your investment. To avoid a loss, you need to be very careful in analyzing the market. You need to make small investments that are beneficial in the long term.

  1. Cybercrime

Cryptocurrency is a technology-based investment making it susceptible to cyber-attacks. Hacking is very serious since there is no way of retrieving your lost Bitcoins. Most buyers lose their cryptocurrencies on mining and exchange losses. Exchange platforms are more likely to be hacked despite having the protection of a digital wallet. If you have a wallet and misplace your key, there is no other way to access your coins. Make sure that you research your crypto wallet to ensure that you have the best option.

  1. Fraud

There is also some fraud in the crypto trading market in addition to cybercrime. Most buyers and sellers are looking to trade Bitcoins online since its popularity and these online exchange platforms can be fake. The Securities and Exchange Commissions have warned against these platforms where genuine Bitcoin investors are swindled of their Bitcoins in fake exchange platforms. This poses a big risk for investors. A site like xbt app ifex 360 AI is an authentic crypto trading platform fully equipped with an SSL certificate ensuring the safety of your digital information.

  1. Little regulation

The Bitcoin market does not have any regulation. The government does not have a clear standing point on cryptocurrency since the market is very new. The lack of tax makes it an enticing investment option. Lack of taxation could lead to a problem if Bitcoin becomes a competition for government money. At the moment crypto is not widely accepted but the future is changing.

  1. Reliance on technology

Bitcoin exchanges happen online making it reliant on technology. Coins are mined digitally through a smart wallet. Without this kind of technology, cryptocurrency is worthless. There is no physical backup like other kids of investments or currency. With other investments like real estate, gold, mutual funds, or bonds you can own something that is exchangeable. Cryptocurrency is 100% backed by technology making Bitcoin owners vulnerable to online fraud and a system that can be easily shut down.

In summary, cryptocurrency is a young technology. Bitcoin has introduced 10 years ago and is yet to become something widely acceptable. With so many changes in the past few years, the future of the market is unpredictable. Bitcoin could be useless in the future. The best way to approach this investment opportunity is with a lot of care and caution.