What are the risks associated with investing in cryptocurrencies?

1. Volatility: Cryptocurrencies are known to be extremely volatile, meaning that the prices can quickly and drastically change. This makes them an extremely risky investment, as even the slightest dip or rise in the market can have major implications on an investor’s portfolio.

2. Lack of Regulation: Cryptocurrencies have yet to be fully adopted and regulated by governments, leaving investors vulnerable to fraudulent activities such as hacks and scams.

3. Security Risks: Many investors are vulnerable to security risks associated with storing their cryptocurrencies on online exchanges, which can be subject to hacks and theft. Storing your cryptocurrencies offline in a secure wallet is recommended for maximum security.

4. Limited Use Cases: Cryptocurrencies are currently mainly used for investment purposes, meaning their utility for mainstream commerce is limited. This could limit their future potential and make them a poor option for long-term investors.