1. Volatility: Cryptocurrency markets are highly volatile and can experience significant price swings in a short amount of time.
2. Security risks: Cryptocurrency exchanges and wallets have been targeted by hackers and other criminals seeking to steal users’ funds.
3. Regulatory risk: Cryptocurrency regulations are still evolving and uncertain in many countries, resulting in potential legal uncertainties.
4. Liquidity risk: Cryptocurrencies may be difficult to convert into cash when needed, as the market may be illiquid at times.
5. Counterparty risk: When exchanging cryptocurrencies, there is always a counterparty involved, which increases the risk of fraud or theft.