What is biggest risk in crypto? The threat of regulation
Unsurprisingly, perhaps the single largest risk facing Bitcoin, and cryptocurrencies more generally, is the threat of tighter regulation. In 2021, China, the world’s second-biggest economy, effectively made it illegal for citizens to mine or hold any cryptocurrency.
What are 2 risks of cryptocurrencies?
- Drawback #1: Scalability.
- Drawback #2: Cybersecurity issues.
- Drawback #3: Price volatility and lack of inherent value.
- Drawback #4: Regulations.
- The takeaway:
What are the risks of investing in crypto?
- Price volatility & manipulation. Cryptocurrencies have been on a wild ride.
- Lack of regulations.
- Market adoption.
- Security, custody & consumer rights.
- Exiting the market.
Why should not invest in cryptocurrency? Aside from the sheer risk of loss, trading crypto comes with the risk of fraud, a lack of transparency, and the potential for outright digital theft that (theoretically) isn’t supposed to happen.