5 reasons it is dangerous to trade cryptocurrency and also exceedingly risky.
As you well know if you are reading this, Warren Buffet believes Cryptocurrency is absolute trash and definitely Not an asset worth investing in and we think so too.
Generally, the pull to such unhealthy investments is caused by greed and the promise of a windfall of gain overnight without the warning that such wind just might take you away completely.
If anyone is pressuring you into trading cryptocurrency…ask yourself…what does he or what do they stand to gain?
SHORT ANSWER: YOUR MONEY!
5 Reasons it is Dangerous to Trade Cryptocurrency
1. The Cryptocurrency Asset Has no Long Term Value
What a lot of Cryptocurrency traders haul back when told that crypto isn’t real and therefore worthless, they respond with the dollar isn’t real too but we say it is and so it is.
That is only partially true.
The Dollar might not be ‘real’ in the sense that it is not backed by gold but by the belief of its users, nevertheless, the dollar is backed by the different world economies that require it to trade as well as Corporate Global Financial Institutions regulating it and other world currencies to ensure fair use and fair play.
In other words, the goods, services and global trade interactions that require the dollar as a vehicle for the exchange of value give the dollar its VALUE. Cryptocurrency doesn’t have this.
Cryptocurrencies are mere tokens with very little regulation and a lot of manipulative interference from unscrupulous persons and institutions.
2. Decentralized Exchanges Dominate Cryptocurrency Investing
Cryptocurrency trading is dominated by emotion driven retail traders trading through decentralized exchanges that are easily swayed by a few institutional traders.
This kind of uninformed trading leads to unpredictable volatility, spikes and very high risk. The perfect recipe for chaos and disaster.
3.Cryptocurrency helps to fund Illegal Practices
The rise of cryptocurrency came mostly from backhanded deals on the dark web. Bitcoin transactions are anonymous. This is why it is favoured by criminals. The address to a bitcoin digital wallet is a set of alphanumeric code.
It is therefore impossible to identify either the sender or the recipient thereby enabling large scale criminal money transfers which the persons don’t want traced,fraud, and money laundering across nations and much more.
These illegal practices have soiled the reputation of cryptocurrency as a dark currency favoured by criminals to hide their illegal activities online.
4. High Risk Of Cryptocurrency Hacks
This is one of the deadliest reasons it is very dangerous to trade Cryptocurrency. As if trading Bitcoin and all the other crypto tokens you have yourself roped in weren’t hard enough, there is the high risk of cryptocurrency theft, with hackers stealing huge sums of cryptocurrency from the major exchanges.
The Biggest Cryptocurrency Hacks so far Include:
- Bithumb,South Korea’s biggest cryptocurrency exchange.The Bithumb hack took place on June 19 2019, with about $30 million in cryptocurrency tokens stolen.
- Coincheck a Japanese exchange suffered an attack in 2018 which went down in history as the biggest Cryptocurrency theft to date, the cost Coincheck 523 million NEM coins valued at about $534 million.
- Coinrail Hack where the thieves took about $37.2 million worth of digital currency.
- BitGrail, an Italian exchange, was hacked with $195 million in the token nano stolen.
These are a lot of hacks within a short period of time, worth a lot of money with very little investigation to show who actually did what to who when. To make matters worse, these tokens were bought with real dollars.
5. Poor Regulation Of Cryptocurrency
Without being dramatic, cryptocurrency investments require the highest level, top grade, airtight kind of regulation but crypto traders thrive on the anonymity of this virtual token hence any attempts to strongly regulate it would lead to heavy swings in the market.
Utmost discretion and care is therefore advised when trading crypto because with poor regulation on decentralized platforms which have proved to be highly susceptible to cryptocurrency hacks and large scale theft, the risk of getting destroyed trading cryptocurrency is very high.
Top Quotes From Influential Financial Analysts, Investors and Economists on Reasons Not To Trade Cryptocurrency
1 “It’s a bubble that’s going to give a lot of people a lot of exciting times as it rides up and then goes down” – Joseph Stiglitz (Nobel prize-winning Economist)
2 “avoid Bitcoin like the plague,” “There is nothing to support Bitcoin except the hope that you will sell it to someone for more than you paid for it.” – Jack Bogle (Vanguard Founder and father of The Index Fund)
3 “The currency isn’t going to work. You can’t have a business where people can invent a currency out of thin air and think that people who are buying it are really smart.” – Jamie Dimon (JP Morgan Chase & Co)
4 “[Bitcoin] itself is creating nothing. When you’re buying nonproductive assets, all you’re counting on is that the next person is going to pay you more because they’re even more excited about another next person coming along.” – Warren Buffett (Richest Investor on Earth)
It is a popular African saying that “A fly that doesn’t listen to advice usually follows the corpse into the grave”.