Chapter 3
Recognizing the Risks of Cryptocurrencies
IN THIS CHAPTER
Understanding the concept of return in crypto investing
Getting to know cryptos’ risks
Seeing an example of cryptocurrency return versus risk
Exploring different types of cryptocurrency risks
Applying your risk tolerance to your investment strategy
So you’re excited to jump on the crypto wagon, perhaps because you expect a gigantic return (profit) on your investment. That’s basically the reward for investing. However, you can’t consider return without also looking at risk. Risk is the uncertainty surrounding the actual return you generate. What may represent high risk for others may not be as risky for you due to everyone’s unique lifestyles and financial circumstances.
Cryptocurrencies have shown their fair share of volatility, which has made some investors millions of dollars while wiping out some others’ initial investment. This chapter looks at cryptocurrencies’ price volatility, defines cryptocurrency rewards ...
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