All the risks that cryptocurrency investors should be aware of!

We know that cryptocurrencies are still relatively new and they are volatile. Hence they sometimes become risky for investors. They become quite vulnerable to scams, hacks, bugs and volatility, and many times investors lose their hard-earned money. Investors should therefore be aware of the risks discussed below before investing in crypto. So let's discuss:

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USER RISK:

When we do any transaction we must exercise due care during this transaction. Because we all know that there is no way to reverse or cancel a cryptocurrency transaction once it has already been sent. Even when we complete a transaction to a wrong address or in a wrong way then it is not possible to get the money back from there. By some estimates, about one-fifth of all bitcoins are now inaccessible due to lost passwords or incorrect sending addresses. So during the transaction the user must be aware enough to avoid all these risks.

Regulatory Risk:

As we know these cryptos are not regulated yet. Due to this digital uncontrollability, they often become involved in scams, hacking or other scams. But we also know that although they are unregulated, governments in different countries want to regulate them in different ways. However, such attractive control systems may be a challenging issue or may reduce their prices in the market. As we have recently seen Bitcoin prices fall even after spot Bitcoin ETFs were approved.

Counterparty Risk:

Many of us store these digital assets on various exchange sites and also trade by investing there which are controlled by third parties. As a result, we see various incidents such as theft or scams on various exchange sites almost every now and then because theft or damage by a third party can lead to loss of one's entire investment.

Management risk:

Since these digital assets are still new, there are no rules or regulations in favor of or governing them. Due to the lack of coherent regulations, there are few safeguards against fraudulent or unethical management practices. And for all these reasons there are many investors who have lost huge sums to management teams that have failed to deliver a product.

Programming Risk:

Many times investors lose money due to this type of risk. Because it uses automated smart contracts to control the movement of deposits of investors and lending platform users. And they assume the risk of losing their investment due to a bug or exploit in the programs.