Trading on crypto exchange platforms does come with its share of risks. While these platforms do their best to make everything as safe and straightforward as possible, not everything can be accounted for all the time.
In this article, we’ll take a look at the top three risks to consider when using a crypto exchange to trade. It is important that you are aware of these risks so you can account for them as you go.
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Let’s take a look, shall we?
#1 – Cryptocurrency Volatility
This is an obvious one. It is unlikely that you will start trading without being warned about the risks of the volatile cryptocurrency market. Each and every cryptocurrency changes in value constantly. Whether they appreciate or depreciate, you can be sure that the value will be different when you bought it to the time that you choose to sell it.
This is essentially how you make money through cryptocurrency trading. You buy a currency that appears to be appreciating, then sell it before it depreciates.
That being said, lack of experience can cause you to make a bad trade and end up losing money just as quickly!
#2 – Cryptocurrency Isn’t Checked by the Government
Cryptocurrency isn’t like fiat or government-issued money. Neither banks nor the government are there to keep tabs on it. This is why the value of such currencies fluctuate so much.
#3 – Security Issues
Again, crypto exchange platforms do all that they can to protect your trades. However, since cryptocurrency is not a government-issued form of money, it is somewhat easier for a hacker to acquire it.
The odds of this happening on a reputable platform are low. However, you should still be careful where you place your trades. Avoid any trade that seems sketchy in any way!
Stay safe and happy crypto trading!