There is another hype over cryptocurrencies at the beginning of 2024, and the main reason for that is related to the huge rise in the price of BTC and ETH. Also, many other cryptocurrencies are facing a positive increase in recent times. The current price of Bitcoin is over $60,000, while ETH is valued at around $2,500. This is much higher than in the same period last year. Also, many predictions say how these values will more likely continue to rise even more in the future.
There are many reasons why people are interested in this market. Besides the currently high prices and tendentious for positive trends, we also have to mention the high risks of the next recession. One of the great features of cryptocurrencies is that most of them are decentralized, which means that you can protect your funds from high inflation in case of recession.
If you are interested in investing and trading with these digital assets, you will need an e-wallet and a proper web platform where you can trade. Visit niveshmarket.com to read more about trading websites. Furthermore, it is essential to learn more about this market and different factors that could influence the values. You have to know that there are always certain risks present in trading. Here are the potential risks of trading with cryptocurrencies in 2024.
High Volatility
While this feature represents the main reason why so many investors are interested in buying crypto in the first place, you have to know that it can quickly switch to negative tendencies resulting in losses. The best example is the price of Bitcoin during 2017 and 2018, when it reached the record-high price of near $20,000, but have quickly fallen to under $4,000. During the next few years, the price was fluctuating between $10,000 and $5,000 until it started to rise again at the end of 2024.
Many experts claim how that this will not happen again, but you should be aware that some factors might cause the drop. For instance, changes in supply and demand are an important factor, and in case that many investors suddenly decide to sell, the price will drop significantly. Besides that, there are daily changes, which are especially important for day traders and people who recently bought this digital unit.
Potential Criminal Activities
Since the introduction of the blockchain market, a lot of people became suspicious about some of its features. The fact that they are decentralized brings many benefits. Still, there is a fear that people could use this system for funding criminal organizations, hide transfers, avoid taxes, launder the money, and many other potential issues. While there are no tendencies in most countries to ban certain cryptocurrencies, there is always a fear for some regulations that could impact the lower price.
Lack of Regulations
As we already mentioned, the biggest issue with the whole system is related to the lack of official regulations. Some countries have introduced laws about the taxes that we will have to pay after gaining profit. Still, it remains unregulated in most of the world. In case that some big economy like the United States, Japan, or Germany decides to make this market illegal, it will cause a significant fall in prices of these units.
Potential Security Issues
Another potential problem is related to platforms where we can buy or sell cryptocurrencies. While blockchain technology represents one of the safest platforms today, hackers are keeping track of the most recent improvements in technology and cybersecurity, and there were some cases where they managed to hack websites and steal large amounts of money.
The record-high amount weighs over $500 million, while there are many other cases where hackers managed to steal millions from online crypto exchanges. In that matter, it is crucial to learn more about security and how to keep your funds safe. The best way is to use some alternative instead of keeping the crypto on the account of the online exchange. The best solution is an offline digital wallet.
It Represent a Speculative Market
The main risk is the same as with the stock market, where people are betting on the movement of values. However, it is not a rare case that big investors could pump the price until they decide to sell or to make it much lower and they buy some units. You could face serious losses if you decide to invest at the wrong moment.
The best way is to keep track of current trends and tendencies, along with detailed stats about the whole market. However, that can be quite complicated since there are many analyses available, but a lot of them are shared by other investors who will try to promote certain cryptocurrencies. Therefore, try to find reliable financial experts to read relevant predictions and other information.
Conclusion
As we can see, the risks are mostly the same as in previous years. The developers are constantly working on improving the safety of the system and prevent unauthorized breaches and hacker attacks. When it comes to values, it can be complicated to predict the movement, but you can keep track of changes and try to determine the best moves to secure profit and prevent losses.
Also, be sure to use the proper method of storing your assets, and always look for reliable and well-known services when you want to buy or sell them on the market. There are many expert analyses about the most likely predictions related to the value of BTC, ETH, and other cryptocurrencies in the future.
Many of them are showing data that are positive for this market, which means that the chances for the continuous rise are excellent. Also, you should avoid focusing only on one type of unit. Instead of that, look for different options that have good chances to become more valuable over time. This strategy will increase the probability of making a profit, especially if you manage to find some more affordable option that will reach significantly higher value.
