1. Volatility: Cryptocurrencies are still a relatively new asset class and are highly volatile. Prices can fluctuate significantly in short periods of time, meaning prices can rise or fall quickly without warning.
2. Security: Cryptocurrency exchanges and wallets can be targeted by hackers, which could lead to the theft of funds.
3. Lack of regulation: Cryptocurrencies remain largely unregulated, meaning there is an added layer of risk in terms of protecting your investments.
4. Loss: Cryptocurrencies are susceptible to loss due to hardware failure, forgotten passwords, or software bugs.