1. Price Volatility: Cryptocurrency prices are highly volatile and can swing dramatically in either direction due to market speculation, government regulation, and other external factors.
2. Security Risks: Cryptocurrency exchanges and wallets can be targeted by hackers looking to steal digital assets.
3. Regulatory Risk: Governments may impose restrictions on the use of cryptocurrency or issue regulations that could reduce the value of digital assets.
4. Tax Risk: Cryptocurrency profits may be subject to taxation, but many investors are unaware of their taxable obligations.
5. Liquidity Risk: Many cryptocurrencies are difficult to buy or sell due to low trading volume, which means it could take longer to convert your assets into cash.