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Understanding Crypto Investment Risks Before Expecting Profits

Understanding Crypto Investment Risks Before Expecting Profits

As a trading activity, crypto investment risks must accompany investors. That's why before you get involved in the investment, understand the operating rules, including the risks that investment actors or investors will face. Indeed, the fever of investing in crypto digital currencies is currently being experienced by our country's investors. 

So you could say investing using virtual currencies is currently on the rise. This is not without reason, considering the increase in value is so high. This surge in value has exceeded other popular instruments, namely gold. However, investing in cryptocurrencies still has risks like most asset investments. So even before deciding to try crypto investing, the chances of crypto investing are essential. 

Crypto Investment Risks Stalk Investors 
Here are the various chances to make it easier for potential investors to know anything about crypto investment risks. That way, you are ready with all the risks involved and are more considerate when investing. 

1. There is no underlying asset 
form of crypto investment risk is that there is no underlying asset. This was also stated by Erwin Haryono, the Executive Director of BI. Indeed, BI often warns investors about the risks of investing in crypto because there are no underlying assets. The underlying asset is an asset in the financial sector that is the essential reference for the value of the derivative. 

In the Islamic model of finance, the underlying asset element is one of the things that must be in place to avoid illicit transactions or commonly referred to as usury. Therefore, the existence of underlying assets, as well as security issues during agreements with the involvement of many parties to carry out exchanges on derivative contracts, can be considered very controlled and far from fraud problems.

2. Price fluctuations are high
Not only do they not have a clear underlying asset, but another form of crypto investment risk that was also warned by the OJK official body is that the price fluctuations are pretty high. The change refers to the situation in which the price increases or decreases. This is also experienced in digital model currency transactions. According to several financial experts, digital crypto assets include commodities with unstable fluctuations in value. 

So that it can be interpreted, the investment made by investors may increase at certain times but does not rule out the possibility that it will slowly go down even if the amount is drastic. So it can be concluded that when you want to dive into crypto digital currency investments, the losses and profits obtained cannot be predicted. So it is reasonable if the asset is included in the group so speculative. 

3. The magnitude of the opportunity for attacks from cyber
The types of risks that lurk in the next crypto investment transaction are those from cyber parties. Because the investment takes place digitally, they automatically lose the assets that investors have; of course, they are likely to experience it. In 2019, for example, the number of losses suffered by the theft and hackers' virtual currency.

That number has doubled from the previous 2018, which was only around USD 1.74 billion. Not only targeting investors, but crypto digital currency hacking crimes are also rife on company-owned servers. 

The various risks of crypto investment are essential for anyone to pay attention to, especially for those who are just starting to enter the world.

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