Benefits:
1. Increased Liquidity: Cryptocurrencies provide more liquidity than traditional investments as these markets are open 24/7. This means you can access your funds at any point of the day.
2. Low Transaction Costs: Transactions involving cryptocurrency are typically low in cost compared to other traditional payment methods and currencies.
3. Portability: Cryptocurrencies are easily transferrable and can be stored in digital wallets. This makes them ideal for long-term investments or short-term trading.
Risks:
1. Volatility: Cryptocurrency markets can be extremely volatile, which means that prices fluctuate greatly over short periods of time. This can make it difficult to identify opportunities for investment.
2. Fraud: As cryptocurrency transactions are not regulated, it is easier for individuals to commit fraud through these channels.
3. Inadequate Regulation: Cryptocurrency exchanges are largely unregulated, meaning there is a risk of fraud and theft if you don’t do your due diligence.