With the huge profit margin and potential in crypto trading, one should not forget that it also has several risks. However, many crypto exchange platforms try to minimize those risks for the investors by using advanced features such as KuCoin, which has the trading bot in which you can set the boundaries and the maximum loss and win. But still, the risks are real, and they can cause irreparable damage if they are not analyzed soon. This article will understand the risk associated with a cryptocurrency exchange.
Risk Associated With Crypto Exchange
Since the introduction of crypto in 2009 by bitcoin, crypto trading has been making tremendous progress, but over time and due to its nature, there are many risks associated with it. Crypto is a decentralized currency that exists purely outside of the central system under the blockchain network. But the decentralized nature, along with the advantages, has some drawbacks, and these are:
Volatility may be the most significant risk in cryptocurrency investment. The coins can instantly gain colossal popularity and value, but they can also lose weight in hours. Crypto investment is the most volatile system of investment available. The volatility in crypto is basically due to the trend following the mass public, and if there is a tiny price drop, the mass public starts to sell it.
Cyber theft and Hacks
Although crypto is believed to be a highly secure network with currency stored in variable block chains, it is not entirely hacked and cyber-attack-proof. There are examples where hackers have taken bitcoin and other currencies worth millions. There are also chances of theft from the wallet and crypto exchange. Some crypto exchanges provide extensive security options, such as KuCoin, which offers additional security layers for maximum safety.
The lack of a central tracking and monitoring system is the most dominant feature of the cryptocurrency, but it also has its drawbacks. If there is an error in most financial transactions, you can concern the relevant authorities, but in the bitcoin exchange by the decentralized system, there is no way to claim the amount back if it is lost. It is better to do all the transactions by a cryptocurrency exchange, but it has some commission. KuCoin provides secure transactions without any fees and is nearly free.
With the rise of crypto trading and the popularity of crypto exchanges, many unauthentic crypto exchanges have also emerged. As a result, picking the authentic and genuine one has become difficult. These inauthentic crypto exchanges are filled with glitches and errors and provide little to no security. It is better to choose only the best and highest rated platforms, such KuCoin, used by one out of every four investors outside the US. It provides secure transactions with its currency called KCS. It also supports the bitcoin mining pool, affiliate program, and NFT supports.
Every coin has two sides. Similarly, crypto trading has its pros and cons, but with the right crypto exchange platform such as KuCoin, you can minimize those risks. The remaining update of every news in the market is the key, and KuCoin provides every detail with its latest Cryptocurrency News feature.