{"id":3410,"date":"2021-09-09T17:05:35","date_gmt":"2021-09-09T17:05:35","guid":{"rendered":"https:\/\/icoholder.com\/blog\/?p=3410"},"modified":"2025-04-29T16:13:21","modified_gmt":"2025-04-29T16:13:21","slug":"cryptocurrency-investment-risks-explained-in-simple-terms","status":"publish","type":"post","link":"https:\/\/icoholder.com\/blog\/cryptocurrency-investment-risks-explained-in-simple-terms\/","title":{"rendered":"Cryptocurrency Investment Risks Explained In Simple Terms"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_75 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/icoholder.com\/blog\/cryptocurrency-investment-risks-explained-in-simple-terms\/#What_is_it\" >What is it?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/icoholder.com\/blog\/cryptocurrency-investment-risks-explained-in-simple-terms\/#What_are_the_biggest_cryptocurrencies_worth\" >What are the biggest cryptocurrencies worth?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/icoholder.com\/blog\/cryptocurrency-investment-risks-explained-in-simple-terms\/#What_are_the_merits_of_cryptocurrency\" >What are the merits of cryptocurrency?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/icoholder.com\/blog\/cryptocurrency-investment-risks-explained-in-simple-terms\/#How_do_I_buy_cryptocurrency\" >How do I buy cryptocurrency?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/icoholder.com\/blog\/cryptocurrency-investment-risks-explained-in-simple-terms\/#Who_offers_cryptocurrency\" >Who offers cryptocurrency?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/icoholder.com\/blog\/cryptocurrency-investment-risks-explained-in-simple-terms\/#What_scams_should_I_look_for\" >What scams should I look for?<\/a><\/li><\/ul><\/nav><\/div>\n<p data-pm-slice=\"1 1 []\">Are you as confused as the rest of us when it comes to Bitcoin, Dogecoin and any other coin that isn\u2019t a nickel? Take a look at this guide to understanding cryptocurrencies for the basics of the market, with cryptocurrency investment risks explained clearly to help you make informed decisions.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-3411 aligncenter\" src=\"https:\/\/icoholder.com\/blog\/wp-content\/uploads\/2021\/09\/Screenshot_156.png\" alt=\"\" width=\"855\" height=\"500\" srcset=\"https:\/\/icoholder.com\/blog\/wp-content\/uploads\/2021\/09\/Screenshot_156.png 855w, https:\/\/icoholder.com\/blog\/wp-content\/uploads\/2021\/09\/Screenshot_156-300x175.png 300w, https:\/\/icoholder.com\/blog\/wp-content\/uploads\/2021\/09\/Screenshot_156-768x449.png 768w, https:\/\/icoholder.com\/blog\/wp-content\/uploads\/2021\/09\/Screenshot_156-103x60.png 103w\" sizes=\"auto, (max-width: 855px) 100vw, 855px\" \/><\/p>\n<h3><span class=\"ez-toc-section\" id=\"What_is_it\"><\/span>What is it?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p data-pm-slice=\"1 1 []\">Cryptocurrency can make people feel like outsiders. Like stocks, it creates wealth for those in the know. At the same time, it often leaves others in the dark.<\/p>\n<p>Put simply, cryptocurrency is a digital payment system that doesn\u2019t require banks to verify transactions. These systems are called \u2018decentralized\u2019 because there is no hierarchy. No single institution prints or controls the money. Instead, a peer-to-peer network validates transactions. Cryptocurrency investment risks explained through this structure often stem from a lack of regulation. This can lead to both high potential rewards and increased volatility.<\/p>\n<p>Cryptocurrency can be tailored to a specific company and can be swapped for goods and services online. It uses strong cryptography to ensure secure online transactions. This extreme security is its main appeal over regular bank-verified transactions.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"What_are_the_biggest_cryptocurrencies_worth\"><\/span>What are the biggest cryptocurrencies worth?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>By far the most famous and widely used currency, Bitcoin has a market capitalization of $892 billion. Behind it is Ethereum, which is worth $399 billion and then Cardano at \u00a389 billion. The ten largest trading cryptocurrencies also include Binance Coin at $72 billion, Tether at $64 billion, XRP at $53 billion, Dogecoin at $36 billion, Solana at $35 billion, Polkadot at $30 billion and Uniswap at $14 billion.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"What_are_the_merits_of_cryptocurrency\"><\/span>What are the merits of cryptocurrency?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p data-pm-slice=\"1 1 []\">Supporters of cryptocurrency view it as the future. It removes central banks from controlling the flow and value of money. By doing so, it frees people from traditional banking systems. Cryptocurrency is seen as a way for the little man to make and transfer money.<\/p>\n<p data-pm-slice=\"1 1 []\">Crypto is also secured with blockchain technology, which is a<a href=\"https:\/\/icoholder.com\/blog\/protecting-digital-art-ownership-with-nfts-and-blockchain\/\"> decentralized technology<\/a> that manages transactions over many computers and is well-trusted with the security of transactions. Cryptocurrency investment risks explained often stem from misunderstandings about how this technology works, leading some investors to underestimate potential vulnerabilities or market swings.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"How_do_I_buy_cryptocurrency\"><\/span>How do I buy cryptocurrency?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>If you\u2019re looking to<a href=\"https:\/\/robinhood.com\/crypto\/XRP\"> invest in XRP<\/a>, Bitcoin or any other cryptocurrencies, there are things to consider. For example, some cryptocurrencies like Bitcoin, allow for their purchase with U.S. dollars, but others require another cryptocurrency to buy them.<\/p>\n<p>Before you can buy anything, however, you will need a \u201cwallet\u201d mobile app to hold your currency. Applications like Coinbase or Trust will allow you to transfer real money to buy cryptocurrencies.<\/p>\n<p>Once you have these, be sure to do your research. Learn about cryptocurrency exchanges and choose which one feels best to you. Look at who owns the company, are there any other major investors, will you own a stake in the company or just currency? And is the currency developed or looking to develop? Remember, the more developed a currency is, the less risky your investment is likely to be.<\/p>\n<p>Instead of putting all of your money into Bitcoin just because it\u2019s the most famous and richest, opt to make many smaller investments. That way, if anything goes wrong, you haven\u2019t lost everything. Remember that a mention of the wrong thing from <a href=\"https:\/\/www.cnbc.com\/2021\/06\/04\/bitcoin-falls-after-elon-musk-tweets-breakup-meme.html\">Elon Musk has been known to tank Bitcoin<\/a>, for example. A lot of things can affect stocks. Prepare for very high highs and very low lows.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Who_offers_cryptocurrency\"><\/span>Who offers cryptocurrency?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Cryptocurrencies can be bought from online brokerages like Binance.US, Coinbase, eToro, and Gemini.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"What_scams_should_I_look_for\"><\/span>What scams should I look for?<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>We\u2019re talking about your money here, so there are naturally a lot of greedy people looking to take it off you. Stay alert for red flags and make sure you\u2019re 100 percent sure before you buy.<\/p>\n<p>There are a lot of fake websites that have been created to look like original start-up companies. Always make sure to check for the lock in the address bar that will prove it is a legitimate website. The lock will show you that the website is secure, as will a website with \u201chttps\u201d in the address. If a website is missing that, it\u2019s probably a scam. It is also possible for you to be directed to another website for payment, so keep an eye on that lock for every page.<\/p>\n<p>There are also a lot of fake mobile apps popping up in Google Play and the Apple App Store. Stakeholders are usually quick to shut them down, but it is often not quick enough for the thousands of people downloading them into their phones. Make sure to check the reviews, which are just as suspicious if there are none.<\/p>\n<p>Finally, be careful who you trust on social media. Even a pseudo-celebrity can be a scam artist, and, in fact, there is a string of \u201cpump and dump\u201d schemes by YouTubers currently being uncovered. Plus, you can\u2019t be sure you aren\u2019t following imposter accounts or hacked accounts. If you have doubts about an email from a company, ask someone in the company and keep your company choices to those who staff real people. An automated message system is likely hiding something.<\/p>\n<p>Buying cryptocurrency is a risk, so be sure to really think through your choices before you go spending all your hard-earned money.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Are you as confused as the rest of us when it comes to Bitcoin, Dogecoin and any other coin that isn\u2019t a nickel? Take a &hellip; <\/p>\n","protected":false},"author":15,"featured_media":3411,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"class_list":["post-3410","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-bitcoin"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Cryptocurrency Investment Risks Explained In Simple Terms<\/title>\n<meta name=\"description\" content=\"Cryptocurrency investment risks explained clearly to help you understand potential dangers before putting in your money - IcoHolder.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/icoholder.com\/blog\/cryptocurrency-investment-risks-explained-in-simple-terms\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Cryptocurrency Investment Risks Explained In Simple Terms\" \/>\n<meta property=\"og:description\" content=\"Cryptocurrency investment risks explained clearly to help you understand potential dangers before putting in your money - 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