Risks of investing in cryptocurrencies

In an era in which the usual cash transactions decreased and were replaced by electronic transactions and payments, the so-called digital currencies or encrypted assets (Cryptocurrencies) appeared, which, despite the doubts that surrounded them in their beginnings - as they were virtual/electronic - they met with increasing welcome and acceptance and demand that raised the prices of digital currencies to levels A record that was impossible to imagine reaching, and it even made its way into international financial transactions and became a focus of curiosity and interest for everyone

Investing in cryptocurrencies has become a topic of interest for most people who want to invest at the present time, especially with the spread of its advertisements on all search and social media platforms as well.

Digital currencies are witnessing a strong rise in the current hours, and the crypto assets that fall in the lower range, along with 30 symbols in the middle category in the “Market Vector” index, which includes the 100 largest digital assets, have risen by 16% and 14%, respectively, so far in November. This exceeds the broader benchmark's 4% gain and Bitcoin's 1% rise, according to Bloomberg.

Risks of investing in cryptocurrencies

In this regard, financial markets expert Dr. Muhammad Abu Al-Fadl said in press statements that cryptocurrencies, such as Bitcoin and Ethereum, are digital currencies that have a great resonance, and despite their spread and high value in recent years, this type of investment entails high risks that must be Take it into consideration.

The financial markets expert continued: First and foremost, cryptocurrencies are known for their extreme fluctuations in value, and the prices of these currencies can be greatly affected by multiple factors such as negative or positive news, government intervention, and changes in financial legislation, and these fluctuations can lead to a significant loss. For investors who have not properly anticipated or managed them.

  All your money can be lost 

  Secondly, there are security risks associated with cryptocurrencies, and despite the secure blockchain technology, the possibility of trading platforms being hacked and cryptocurrencies being stolen cannot be ruled out, and we have heard of many similar incidents in recent years, where hundreds of millions of dollars have been stolen from trading platforms. And cryptocurrency wallets.

Third, investors should be aware of the local legislation and financial laws for cryptocurrencies in their country. Most countries impose restrictions on the use of cryptocurrencies or strictly regulate them, which can affect investments and trades. Therefore, investors should research and contact qualified financial advisors to obtain Accurate information regarding local legislation and financial guidance related to cryptocurrencies.

There are no guarantees for cryptocurrency investors

The financial markets expert explained that there are no guarantees for investing in cryptocurrencies, unlike traditional assets such as stocks or bonds, there is no central regulatory body that regulates this market or provides protection for investors, and therefore, investors bear full responsibility for their investments and must be careful. Willingness to bear potential losses.

The financial markets expert advised investors to deal with cryptocurrencies with caution and carefully study the challenges and risks associated with them before making any investment decision, stressing the need to diversify the investment portfolio and not put a lot of capital in cryptocurrencies only, and to benefit from the experience and advice of qualified financial advisors to obtain on the right guidance and making appropriate decisions for personal financial goals.