Cryptocurrency Investment Risks Returns Revenue and RoI

       Investment in Crypto currencies- Be Alert

There is a lot of talks going on regarding the crypto currencies. It is true that you can make a lot of money in a short period of time. Moreover, the processing fees of the most popular crypto currency, Bitcoin is also minimal. There are so many opportunities that crypto currencies allow you to make money. Are you tempted to invest money in crypto currencies?

Crypto currency returns are excellent

The performance on the crypto currencies is absolutely stunning. The question is whether you should invest in it spending your life saving or take a loan. With all the hype going round with the crypto currencies, you must understand that there is every possibility that the whole crypto currency investment can backfire you and make you penniless.

Crypto currencies are volatile

The volatile nature of crypto currencies can totally ruin you or even reduce your returns on the investments you have made. Hence, if you are aware of what you are investing in. When you lack the knowledge of the crypto currency type, and the pros and cons of investing in it, you can fall in the trap of the crypto currency hype.

You cannot become rich overnight

You have to very well understand that investing in crypto currencies is not a scheme of making you rich easily. It generally needs about one or two years in order to make considerable rewards in Bitcoin investing. Using all your savings or taking a loan can be quite a risky thing, especially when you absolutely don't have the knowledge of the different crypto currency technologies and coins.

Be informed of the investment you are making

It is necessary to be informed, and arm yourself with the knowledge of the entire thing before jumping into a decision. This can definitely help in the significant reduction of the risks associated with the crypto currency investment. Furthermore, you have to identify the crypto currencies that are backed by the solid fundamentals.

You must ask questions to yourself before investing:

  •          Does the crypto currency you are investing have any issues?
  •          What is the value of return you will receive?
  •          Are there any other similar competitors? If so, you must study and compare their valuations.
Often, there are red flags associated with the crypto currencies. The above mentioned points can be helpful in analyzing why shouldn’t invest in the crypto currency that you choose to. 

There are no fixed returns on crypto currencies

You must get used to fact that there is no such concept of making fixed returns while you invest in the crypto currencies. Various scams and Ponzi schemes in association with the crypto currencies have become very dominant in the market. It is advised that you shouldn’t fall prey to such frauds and scams and be careful enough to prevent such unwanted circumstances.

Prediction of the long term benefits are not easy

Crypto currencies are highly volatile in nature and speculating the assets are quite challenging. It is more or less similar to gambling where you should invest only that you have the potential to lose. You will be exposed to tons of crypto currencies in the current market. You will be attracted to invest in them. But, may be, ten years down the line, such crypto won’t have their existence.
Hence, it is very difficult to make any prediction regarding the long term potential and benefits of the crypto currencies that you are currently investing in.

Hacking and other scams are associated with crypto currencies

As technology is getting advanced, we are getting more dependent on the cyberspace and becoming victims of hacking, phishing and online frauds. Cyber scams have become bigger and greater today and you are always under the threat of getting robbed online. 

Common forms of online cryptocurrency fraud

Cyber crimes can be committed only on the internet and are created because of the presence of WWW or the World Wide Web. There are different types of such crimes that are delivered by the criminals. The most common forms include:

  •          E-mail phishing
  •          Hacking the personal information or details of the users
  •          ID decoding
  •          Virus imitation, and,
  •          Other types of cyber vandalism. 

In fact, there are some crimes that are not known to the people and thereby people fall into the trap. Do you know it is the evolution of the internet and its diverse usage across the world that makes the sources of cyber crimes?

You need to be careful and extra cautious while online

According to the reports of several reliable sources, the majority of offenders belong to the 18-30 years age group. You can protect or shield yourself from such situations by being careful, cautious and wise. Think wisely before you are giving out any personal information and watch out for suspicious e-mails. Further, run anti-virus and anti spyware software applications in your cyber system and always try to use unique passwords that no one can crack. Also, for online gambling reliable sites need ot be chosen else there is huge risk of loss.

The digital or the crypto currencies have witnessed a hell lot of troubles with cyber space criminals and hackers over the years of their existence. There are some easy targets, especially those involved in largest Bitcoin and other crypto currency transactions. Have you attained lots of Bitcoins over years? If your answer is a ‘yes’, you must seek additional precaution and safety in your interest.

Using a hardware or paper wallet as means of safety

The safety against the cyber hackers lies with the cold storage via a hardware or a paper wallet. But, unfortunately, according to the recent studies of the University of Edinburgh, the security measure has been identified with a number of security loopholes. Hence, crypto currency always possesses the risks of scams and frauds as compared to other investments. 

You can easily misplace your crypto currencies

Cryptocurrency operates in a very complex and mysterious algorithm that many are not aware of it. In fact, it is quite difficult to understand out where are you storing your hard earned money. A case of UK resident, Mr. James Howells claimed to possess tens of millions of Bitcoin dollars. He stored on a hard drive, but he accidentally misplaced it and it became a trash.

Investing in stocks requires you to have licensed custodians

When you invest money in stocks, there a custodian, who holds the stocks combining the physical as well as digital records and also verifies the transactions. The fund managers are bound to use the licensed custodians, which in return helps to limit the risks involved with the loss and theft. Moreover, you also get an option to buy stocks from companies directly.

There are no licensed custodians in crypto currencies

Such  is not the case with the crypto currencies, as there are no licensed custodians involved, who assures the quality of the crypto currency transactions taking place. This is one of the primary problems faced by the digital currencies. Sadly, there isn’t any technology available as of yet in respect to it. There are several queries arising about ownership records of crypto currency:

  •         What is the software functionality?
  •         Who has the exclusive ownership?
  •         The validated existence of the digital currencies
  •         The impact of hacking and threats on the guardianship of your assets.

Crypto currencies are not at all easy and simple to transact with or trade

Bitcoin, as a digital or virtual currency has gained immense popularity across the globe. But, the irony is that it has been robbed of one of the most vital functions, that, it is making the payments digitally. Stripe, a digital payment processor has ended its absolute support for Bitcoin. Hence, it won’t be wrong to mention that Bitcoin and other crypto currencies have become less functional or beneficial for the payments.

The crypto currencies are not liquid assets. Hence, they are not capable to be included in the licensed funds. A certain percentage of money needs to be kept in the assets so that it can be sold without delay, in case, you, as an investor desire to get some cash back instantly.

Investing in crypto ETF can be a risky venture

The ETF structure is not compatible with the way the crypto currencies trade in the current market. This match is known as an arbitrage in the economic domain. The arbitrage can prove to be disadvantageous to you, as an investor, especially when you don’t have the updated information about the market conditions. Investments can also be made in online startups which are suitable for cryptocurrencies.

Instances of arbitrage in digital currencies more common

In the recent times, it has been a major concern for the regulators that the crypto currencies are more prone to the arbitrage. This because of the relatively low volume of the digital currencies and the extreme price swings that are experienced. For instance, last year, the price of the Bitcoin was found to swing around 30% and even more in a day for six times.

Crypto currencies have been shut down

There is another problem that has been faced by the digital currencies. It is already seen that the most profit making Bitcoin transactions and exchanges have been shut down suddenly without any signs of warnings. According to the reports, more than $1 billion crypto exchange value has been shut down last year. In December, 2017, the currency exchange has to shut down two times in a span of seven days.

The issue needs to be addressed with a practical solution. There needs to be a mechanism that can report with the unpredictability of the crypto currencies and other such instances. An answer has to be identified in respect to the effect on the market price with the crypto currency exchange shut down.

There is no exemption from paying the fees

The real concept of creating Bitcoin was primarily to come up with an alternative to the high transaction fees of the banks. People started Bitcoin trading with the idea that they don’t have to experience the high fees associated with the banks and thereby save money. But the reality is quite different from the notion or the idea.

A percentage of the total transaction amount is charged

When you are trading crypto currencies, you will have to bear the cost of the services? How much will the process cost you? Well, you will be charged with a fraction of the percentage of the total transaction amount. The fraction obviously depends on the exchange. Hence, it is a myth that crypt currency trading doesn’t require any processing fees or it is easily affordable.

Avoid crypto currency exchanges via the currency wallet

You will be happy to know that you have options to avoid the complete exchange process. It will be conducted with crypto currency wallet, allowing you to buy as well as sell Bitcoins. The crypto currency wallet is an app that you need to download on your smart phone. The fee structure is different. It depends on the total number of participants buying and selling the Bitcoins worldwide. The fees are higher when there are more individuals involved in the crypto currency trading. 

There was an instance that took place that makes the higher fees related to higher people trading even more clearly. As per the reports of Bitinfocharts, a fee tracker, an average wallet transaction fee while Bitcoin trading costed around 6 cents. But, in December, 2017, when there was a higher number of people involved with the trading, the transaction fees increased to $55 every transaction


The bottom line is that investing and trading in crypto currency have the potential for making huge revenue in a short period of time. You will find a lot advice on the same, and the dominant press coverage makes it even more accepted around the world. The speedy growth had led to the volatile nature of the crypto currencies. There are several crypto currency fraud and cryptocurrency scams coming up too. Moreover, you need to have the knowledge to understand the crypto currency market well.

Since the crypto currency trading is new in the market, it has some stability issues and is risky as well. You must be aware of the risks, weigh them in contrast to the rewards you will get, and accordingly make the right choice.


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