Cryptocurrencies: what are the advantages and risks?

Cryptocurrencies are assets that have a lot of volatility. This means that your price quote varies more frequently and more intensely . This feature makes the risks higher, both for profit and for loss.

One of the ways to minimize these effects is precisely by creating a diversified portfolio, avoiding putting all your equity invested in a single asset.

Coin loss

One of the advantages brought by cryptocurrencies is the autonomy of being able to act as your own bank. But this also ends up becoming a risk if you don’t take the necessary care.

In the crypto market, you are the only person in control of your own money and your cryptocurrency wallet recovery phrase is the only guarantee that only you have access to your coins . If you lose those words, you won’t be able to get them back.

Likewise, if you mistakenly send your coins to the wrong address, you will have nowhere else to turn to get them back.

Therefore, study and attention are two very important points for anyone who wants to start investing in cryptocurrencies.

Hacker attacks

Cryptocurrencies have an extremely secure system, thanks to the Blockchain. But that doesn’t mean the market is free of malicious people who seek to take advantage of investors.

Therefore, the recommendations for anyone who invests in crypto is not to share data and passwords related to your cryptocurrency wallet and your brokerage account with anyone. Do not even save or write down this data on devices with internet access.