Understanding the Risk and Opportunities of Cryptocurrency

With a new asset class as Cryptocurrency which has allowed users to transfer money equivalent in terms of digital currency codes which are embedded with high end blockchain technology, enabling one to transfer the coin to another using a public ledger which records all the transactions, in form of codes and encrypted codes increasing the number of cryptocurrencies outnumbering to more than 1000 which are available in the digital wallets, which are not alike but the purpose of trading them are similar.

Regulatory aspects

  • Regulating the movement of cryptocurrencies are extremely challenging as the entire ecosystem are designed to function without any central reporting authority or entity in charge of, hence it is just a consensus among the miners
  • the SEC and other regulatory bodies working to bring around an overall control over the new class of assets, however, the roadmap to monitor them like traditional currencies seems to be a task at hand
  • price fluctuations in the digital currency space can impact the value of the investments, made, the software platforms like the Bitcoin Loophole which require controls and regulation from the regulatory authorities and which could increase the risk of investing in such volatile markets
  • the ICO’s are been highly monitored and Sec is actively involved in making the companies follow the standard securities issuing process, detecting frauds which are high considering the fluid markets, which is also a step ahead to regulate cryptocurrencies
  • the exposure of the investors to cryptocurrencies are at an all-time high and there are traditional products being offered in exchange of the digital currencies which are high on the alert radar by regulatory bodies, the future of which is still very vague

The operational issues surrounding the digital wallets are few nagging issues which have to be faced by the traders/investors more cautiously as an incorrect account transfer would mean that there is no way to get the coins back, keeping the coins in private keys is another suitable options for traders who actively trade in the crypto markets, so that they do not lose the opportunity of price fluctuations for the need of coins to execute the trades, operational risk is inherent in any form of trading making this form of crypto trading more prone to be hacked and lost in the digital space of no return. Utilizing the coins and trade effectively in the exchanges of crypto are subject to proper evaluation by the investor and making a profitable income solution.

 

 

 

 

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