• Home
  • Blog
    • Business Partner Magazine Archive
  • Resources
  • About Us
    • Cookie Policy
    • Disclosure Policy
    • Privacy Policy
    • Terms of Website Use
  • Contacts

Business Partner Magazine

Tips and advice for entrepreneurs, start-ups and SMEs

  • News
  • Business Success
  • Marketing
  • Employees
  • Technology
  • Start-up
  • Productivity
  • Communication

Are Cryptocurrencies Safe?

September 20, 2022 by BPM Team

Click here to get this post in PDF

Too long to read? Enter your email to download this post as a PDF. We will also send you our best business tips every 2 weeks in our newsletter. You can unsubscribe anytime.

Enter your NameEnter your Email Address
Futuristic stock exchange

As cryptocurrencies are taking over the world, more people are looking into the world of crypto for high gains. Governments worldwide are struggling to introduce consistent regulations and keep trading within legal boundaries. No matter how popular currencies such as Ethereum or Bitcoin are, one question remains: Is investing in cryptocurrencies safe? The answer is so complex that even researchers believe it’ll take years before it can be known for certain.

Before leaping, you should know a few crucial things. The price of cryptocurrencies fluctuates constantly, and their volatility prevents most investors from making a business move. Also, the financial ecosystem is every scammer’s favorite place. On the other hand, a few security advantages could outweigh the disadvantages. Here is a list of risks you should be aware of before investing in cryptocurrencies.

What Are the Risks Involved?

Although most investments involve some risk, digital currencies such as these come with unique and unexpected risks. 

Complex concept 

Ever since they emerged, cryptocurrencies have earned a reputation as volatile investments. Many factors have contributed to this, but mostly new and inexperienced users. Their lack of knowledge on using, selling and storing these assets has made them easy prey for cyber-attacks, scams, and phishing. However, some trading systems, such as Bitcode Method, are particularly designed to assist new and experienced users with their investments in the cryptocurrency market.  

Lack of regulation

The greatest disadvantage of these and other digital assets is that they aren’t recognized as financial products worldwide. Governments are actively trying to resolve their status, but they can’t seem to agree on their proper regulation. That’s why their regulatory status remains vague in most countries. For example, buying, storing, selling, and transferring virtual currencies in the US are legal and regulated, whereas they’re fully banned in China. Investors should always familiarize themselves with the laws regarding this type of trade because they would face serious consequences in case of restraints. For example, the prices could drop significantly and they would lose money.

Unethical practices

Traders are protected in countries with straightforward regulations. Meanwhile, with vague and inconsistent regulations, the law protects them to a certain extent. As a result, they often fall victim to unethical or unscrupulous practices. That is, hired management teams don’t deliver the product, use incorrect sending addresses or lose keys or passwords causing investors to lose substantial amounts of money.

Market risks

Investors are interested in a quick return on investment (ROI) which is generally the reason why they make crucial mistakes. Firstly, they forget the market is easily subjected to manipulation. Market prices largely depend on popular opinion or media hype. That’s why they increase and suddenly crash. Unfortunately, investors can’t even use information from the past as a reference because cryptocurrency is still considered a fairly new concept. Therefore, there’s no way of knowing how market crashes or other unfavorable circumstances affect a certain cryptocurrency. Investors can mitigate this risk by investing in well-known coins such as Bitcoin or Ethereum.

Platform malfunctions

Traders also trust investment platforms to move their deposits around safely, or custodians store the cryptocurrencies. However, the platforms can experience malfunctions, bugs, and cyber-attacks. Hackers can hack into digital wallets and steal their contents. The same can happen while custodians keep the assets stored for others. Either way, investors can kiss their investment goodbye. For additional protection, they can choose offline hardware wallets.

Irreversible transactions 

Most cryptocurrencies rely on blockchain technologies to provide a secure transaction flow. However, by securing the transactions, these technologies are also making them irreversible. Once the investment or payment is made, there’s no way to get a refund, even if the investor has been phished into a fake investment opportunity. To avoid losing money, investors should be aware of scammers on social media and dating apps and in emails, calls, and texts. 

Easy money is what generally attracts people to invest in cryptocurrencies. However, most of them are concerned about the safety of cryptocurrencies. Although every investment involves some risk, there are some safety practices you can follow. They might help mitigate the risks and ensure safe investments.

Disclaimer: This article is not intended to be a recommendation. The author is not responsible for any resulting actions of the company during your trading/investing experience.

You may also like: Before You Purchase Cryptocurrency, Always Ask These Questions

Image source: Shutterstock.com

Filed Under: Featured Posts, Finance Tagged With: cryptocurrency, digital currency, Featured Article, finance

  • Facebook
  • Instagram
  • LinkedIn
  • Pinterest
  • Twitter
  • YouTube

Disclosure

We earn commissions if you shop through the links on this page.

Recent Posts

  • Ultrahuman Home: The Future of Healthy Living is Here
  • HOA Gate Access Control Systems & Enhancing Security and Efficiency in Gated Communities
  • Huma Deploys Hi Scribe to Automate Clinical Documentation and Billing Using AI
  • Industry Shift at Royal Ascot 2025 Turns Hospitality into Serious Networking Ground
  • Telecom Meets Strategy: How Bryan Cohen Built Global Partnerships to Fuel Scalable Growth

Categories

Archives

Tags

Accounting bitcoin brand business growth business skills business success communication cryptocurrency Customer Service Data design Digital marketing ecommerce Efficiency employees Featured Article finance finances Health and Safety infographic insurance Investing investment legal legal services legal tips Management Marketing marketing strategy Outsourcing productivity property Real estate sales security SEO Social Media software starting a business startup Technology Trading Training website workplace

Innovation in Business MarTech Awards – Best SME Business Support Platform 2024 – UK

Innovation in Business MarTech Awards 2024 UK

CorporateLivewire: Innovation & Excellence Awards – Business Publication of the Year

CorporateLivewire: Innovation & Excellence Awards - Business Publication of the Year

Disclosure

We earn commissions if you shop through the links on this page.

Digital Marketing Agency

ReachMore Banner

Business Partner Magazine

Business Partner Magazine provides business tips for small business owners (SME). We are your business partner helping you on your road to business success.

Have a look around the site to discover a wealth of business-focused content.

Here’s to your business success!

Copyright © 2025 - Business Partner Magazine·