Being a potential market, many profits but investment coin also hidden a lot of risk, great risk. Here are some important alerts that you should not miss. Understanding the risks, risks when investing, electronic money trade will help you weigh, make more accurate decisions.
Risk of investing in electronic money / Bitcoin
CoinAZ.Net classifies the risks associated with investing in e-money in general, bitcoin in particular under the following major categories. (Below we use Bitcoin for the same, which is similar to other electronic currencies.)
Political risk
This is a risk that at present may be low, but one of the greatest risks to Bitcoin. Although Bitcoin is not controlled by any government or individual, you should think about if some major powers like the US or China abstain from Bitcoin (probably for reasons like money laundering, drugs etc.). ), how will the Bitcoin price fall? If belief no longer, Bitcoin will become meaningless no less. If you think it is unaffected, think about how many Bitcoins the stock market is confiscated, how other players will feel about their money.
Most recently, a long-standing Bitcoin BTC-e.com was shut down by the FBI, which still has information that floor owners are trying to fix and compensate for investors, but is now more than a month, and investors are still waiting. (We will update the results of this case).
FBI confiscated computer, data trading platform BTC-E.Com
Risk of price volatility
Price fluctuations are what make Bitcoin attractive. But it is also very risky for Bitcoin. Since its inception, the bitcoin price has risen from 10,000 BTC to just two pizzas worth $ 3,000 in May 2005 and $ 4,400 in August 2017 and promises continued growth. . Bitcoin has experienced a lot of turbulent events such as the MT-GOX platform, the world's largest Bitcoin trading platform, the Japanese hacked in 2014 and the Bitcoin price dropping from $ 1200 to $ 300. Another example of price fluctuations: After a few days of reaching the $ 3,000 mark for the first time, the Bitcoin price has fallen from $ 2800 to $ 1500 on some exchanges, with even a $ 1,200 drop in just one hour. bulk sale. Bitcoin prices were stable at $ 2200 - $ 2300 before rebounding for a long time after that, but many investors cut losses and lost money in a very quick moment.
Price fluctuation, capitalization, Bitcoin trading volume from 15/05 - 15/08/2017
In its history of development, BTC has repeatedly created new highs, but many times it has decreased, causing short-term or impatient investors to cut losses at extremely high levels, up to 25 - 30%.
Risk from hackers / trading floors
This is also one of the biggest risks, which is why many people are most worried about Bitcoin. Currently in Vietnam, there are no specific regulations on Bitcoin in particular, electronic money in general. This means that you are not guaranteed any electronic money transactions, and you are solely responsible for your investments. If you trade on a reputable trading floor, that will limit the risk, but do not forget the event:
+) 2014: MT-GOX closed and all investors lost money.
+)In 2016: Bitfinex was hacked $ 65 million (but they have paid investors another electronic currency)
+)In 2017, BTC-E is closed by the FBI, the risk of losing money is up to 90% (Waiting for results).
Picture when MT.-GOX declared bankrupt
As with many other events, the risk when you wake up getting news floor closes and the money is gone. So long-term investors (not exchange / traders) often store electronic money on their wallets, personal computers, and not on the floor.
While Bitcoin is so valuable, using an unsecured computer is a risk that can cost you a fortune. The principle of electronic money, when transferred, can not be taken back, nor can the owner of the account receive money. There are also fraudulent situations when trading non-trading electronic currency, we will talk more about fraud cases in other articles.
Risk from electronic money itself
The electronic currency itself can also be a risk, there is no denying that developers, issuing e-currencies suddenly change their minds or change plans, even canceling them. Some examples are:
Ripple: Suddenly freeing some extra XRP for the Bitcoin owner who made XRP buyers feel down, feel the inflation and worthless of the money they are holding at any moment. The publisher can also generate billions of XRP. Later Stellar (STR / XML) also had similar moves.
ETH: The founder is planning to change the form of POW to POS, not evaluating the change is good or bad, but it means that the fate of coin easily changed by the people / groups. set up
Bitcoin: By the power of the digger, the miners (diggers) can completely change the direction, the future of bitcoin
Poloniex announced the cancellation of a series of electronic money
This is just an example of the risks posed by the electronic money itself. And a lot of electronic currency is permanently deleted on the exchange, meaning you can find the buyer yourself, but usually no one to buy the currency was deleted and of course at that price. Its very cheap also there are still no buyers.
The top 4 risks to investing in Bitcoin / Electronic Money are just a warning, not always when it happens, but there are potential risks you need to know to consider your investment limit. CoinAZ.Net recommends that you invest only a fraction of the amount of your investment or financial plan.