3 Disadvantages of Trading Crypto

Several crypto-assets such as Bitcoin, Ethereum, Ripple, Tether, and Doge have skyrocketed in value since the beginning of this year and are profitable for their holders. What about the risk aspect? For laymen who want to get to know crypto assets, they can try to follow dan hollings coaching. Crypto assets which are also often called crypto coins or crypto money are tempting to trade (trading) quickly because they can be done throughout the day without holidays (24/7).

The value of Bitcoin and other crypto coins can rise quickly without any restrictions because this digital asset exists because of blockchain technology. Blockchain technology prevents information alteration, hacking and fraud in transactions. However, people who are interested in crypto assets need to understand the risks or weaknesses of these coins when used as an investment. Here’s the review:

1. Very High Risk
It is possible that investors or traders who made a profit yesterday could lose out due to buying and selling crypto assets. This is different from investing in the capital market such as stocks or equity mutual funds. If the decline occurs for days, the Exchange authority can also apply a temporary trading suspension (suspension) so that the losses of stock investors or equity mutual funds can be limited.

2. No Fundamentals to Analyze
Cryptocurrencies like Bitcoin, Ethereum, Ripple, Tether, and Doge are not currencies like the US dollar. Because, even though it is called a coin or money, this crypto is not a currency that has a fundamental basis such as the economic condition of a country, reference interest rates, and other macroeconomic data. As for mutual funds, you can see the contents of their portfolios listed in the fund fact sheet.

3. No Authority Body
As mentioned earlier, crypto-assets exist due to blockchain technology which enables all transaction data to be automated. This means that there is also no investor protection or customer service, which listens to public complaints if anything happens to the crypto asset.